institutional investor noun2 •A (usually large) organization that invests (usually large amounts of) money, often on behalf of others for whom it is a fiduciary (such as workers building their savings toward their retirement).The state employees' pension fund is the main institutional investor with a stake in that company. •Any of the individual persons whose money is invested by such an organization.This level of risk does not appeal to institutional investors who are worried about a nosedive of their 401(k) balances. formsinstitutional investors