Importance of institutional investors in developing of capital markets

In the financial system, the efficiency of the capital markets in providingoptimum distribution in terms of term and amount among the economic unitswith the establishment of balance between fund suppliers and demanders isquite important. The countries with developed capital markets have developedfinancial markets and therefore, strong economies.Institutional investors which constitute a serious portion of the sectionthat supplies funds in the economy, have an impulsive effect on the developmentof capital markets with their ability of creating long term sources andprofessional portfolio management.In developing countries like Turkey, enlargement of the institutionalinvestors base shall become a solution for the scarcity of capital stocks andcause increase in domestic savings and create a positive effect in economicdevelopment.Key Words: 1) Institutional Investors, 2) Mutual Funds, 3) Investment Trusts,4) Pension Funds, 5) Insurance Companies.