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Investors come in all shapes and sizes and all are important for different reasons.

They can be categorised as follows:

  • Institutional investors - arguably the most important class of investor due to the large share of the market that they represent.
  • Institutions may be based domestically or internationally
  • The legal structure of the investment vehicle may take the form of a unit trust, investment trust or a venture capital trust
  • The underlying source of money for the investment vehicle may come from the collective investments of individuals, from insurance companies, from sovereign wealth funds, or from pension funds to name but a few
  • The time horizon of an institutional investor may be long (e.g. a pension fund) or short (e.g. a hedge fund)
  • Private investors. While these investors often represent a small share of the total investor base of larger companies, and generally have a shorter time horizon than institutional investors, they do provide an important liquidity to the shares. Private investors may invest directly, through collective investment vehicle (i.e. through an institution), or via an advisor.
  • Private client brokers. These companies, which include wealth managers, invest on behalf of private investors. The liquidity and importance of these organisations should not be underestimated for small and mid-cap companies

 

You need to know which shareholder categories are important to your company, and then find out which individuals at these organisations are the important contacts with whom to make contact .

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