Understanding institutional investors is crucial for successful portfolio management from "summary" of Institutional Investment Management by Frank J. Fabozzi
To effectively manage a portfolio, it is essential to have a deep understanding of institutional investors. Institutional investors play a significant role in financial markets due to the large amounts of capital they control. By understanding their objectives, constraints, and risk preferences, portfolio managers can tailor their investment strategies to align with the needs of these investors. Institutional investors have unique characteristics that differentiate them from individual investors. They often have long-term investment horizons and are focused on achieving specific financial goals, such as funding liabilities or generating returns to support their operations. Additionally, institutional investors may have constraints imposed by regulations, investment policies, or specific mandates that dictate their investment decisions. By understanding these factors, portfolio managers can design investment p...
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