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Types of Investors
Foreign Institutional Investors :Foreign Institutional Investor [FII] is used to denote an investor - mostly of the form of an institution or entity, which invests money in the financial markets of a country different from the one where in the institution or entity was originally incorporated.
In countries like India, statutory agencies like SEBI have prescribed norms to register FII's and also to regulate such investments flowing in through FII's.
Promoters :A corporate promoter is not specifically defined in legal terms but is understood to be a person or entity who is active in the formation, organization, or financing of a corporation. This "person" might, for example, find investors who will buy shares in the corporation, which would provide funds which the company needs for its own purposes. The role of a corporate promoter may be undertaken, wholly or in part, by an investment banker, underwriter, or stock promoter.
A promoter is expected to have a fiduciary relationship to the corporation and to the shareholders, which is to say they are expected to be extremely loyal to the corporation and shareholders (referred to as the principal); they must not put any personal interests before the duty, and must not profit from their position as a fiduciary, unless in a manner to which the principal consents.
A promoter could be a shareholder in a company it promotes, however, if a promoter is the only
shareholder of the corporation, it may be considered in violation of rules established by the Securities and Exchange Commission (SEC),in the US, if it does not disclose this information prior to selling shares to the public.
A promoter may also have a conflict of interests if is it contracted by a corporation and at some point sells some property or other thing of value to the corporation without previously disclosing to the corporation that it was the owner of that property. Because of its close inside relationship with the corporation, the promoter in this case might be able to charge a price much more than the company would otherwise pay. This would be considered to be a breach of their fiduciary responsibility
Financial Institutions : A financial institution acts as an agent that provides financial services for its clients. Financial institutions generally fall under financial regulation from a government authority.
Common types of financial institutions include banks, building societies, credit unions, stock
brokerages, and similar business.
Financial institutions provide a service of moving funds from investors, those with excess funds, to companies, those in need of funds. These financial institutions make it easy and affordable for small investors to invest.
Hedge funds :A hedge fund is a lightly regulated private investment fund often characterized by
unconventional investment strategies and often making use of legal structures (sometimes offshore) to mitigate the effects of local regulation and tax regimes. In contrast to regular investment funds, which are usually limited to only being able to "go long" (buy) instruments such as bonds, equities or money market instruments, hedge funds also have the ability to "short" (sell) instruments which they believe will fall in price. In this way, hedge funds are able to create more complex investment structures which can, for example, profit in times of market volatility, or even in a falling market. They are primarily organized as limited partnerships, and previously were often simply called "limited partnerships" and were grouped with other similar partnerships such as those that invested in oil development. Hedge funds are normally open to institutional or otherwise accredited investors
