The term institutional fund refers to a mutual fund that caters to the needs of high net worth individuals, pension funds, and endowments. The characteristics of institutional funds include both lower operating costs and high minimum investments.
Mutual funds looking to attract investments from pension funds, endowments, and high net worth individuals oftentimes operate as institutional funds. These are mutual funds that distinguish themselves in the following manner:
Note: Institutional funds can include mutual funds as well as hedge and private equity. However, if the fund is established as an institutional fund, the prospectus must indicate this feature.