Analysis of the behavior of institutional investors in the literature

The international financial systems knew important modifications during these last decades. The business of financial intermediation tips over more and more in the hands of new actors that are institutional investors. The rise of institutional investors is an indubitable fact that underlines very numerous researches. It can be analyzed as a deep modification of the capitalism and as a strengthening of the power of the shareholders whose behavior investor and owner is transformed. It is accompanied by the emergence of new finance professions whose the organization structures the practices of investment. The term of institutional investor includes all the financial intermediaries who collect funds to place either with the companies which wish to invest, or by buying securities on the secondary markets of stock exchanges. Institutional investors include banks, insurance companies, pension funds, investment companies as well as organizations for collective investment in transferable securities. Several studies were interested to examine their behavior in financial markets. A first category of works adduces that institutional investors are real "traders". Their main objective is the maximization of the profitability of their short-term investments. Conversely, the second category of works suggests that the proportions of capital more and more important held by institutional investors imply the abandonment of a neutral attitude. Our theoretical investigation of the behavior of these actors has enabled us to highlight several behaviors delegation management, management style and the international diversification of their portfolio.