Institutional Investors – How to Invest as an Organization

If you're investing with CARL on behalf of an organization, you're likely what's called an institutional investor. These differ from private investors in a few crucial ways – but what really makes institutional investors special is the how they gain "accredited investor" status and their ability to shift entire markets thanks to the sheer power of their pooled capital. So let's have a look at some of the biggest fish in the pond and see what CARL can offer them.

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Hedge Fund Investment Strategies for All Types of Institutions

No matter what type of institutional investor you are, CARL gives your clients access to an entirely new investment universe of sophisticated hedge funds.

Banks

Financial Advisors

Wealth Managers

Family Offices

Your Clients' Access

Now Your Clients Get Access to Hedge Funds Previously Only Available for Institutions

CARL democratizes access and enables private investors to get into sophisticated quant hedge fund strategies previously only available to institutional investors and the uber-rich. We believe that algorithmic investment options and the quantitative approach as a whole should be open to any accredited investor.

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Bring Top-Performing Hedge Funds to Your Clients’ Portfolios at Low Minimums

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Benefits Both for Institutions and Their Clients

With its modern and quantitative approach, CARL offers valuable benefits both to you as an institutional investor and to your clients' portfolios.

For Institutions

  • Access to top-tier hedge fund strategies
  • Quantatitive approach
  • Portfolio diversification

For Clients

  • Low minimums
  • High-yield return targets
  • Monthly liquidity

What Investors Say About CARL

Today I checked my stock portfolio and wasn’t feeling so great, way down. Then I checked my CARL portfolio and to my relief it was up. So great to have options regardless of the overall market!

John Lawyer
Georgia

Our Strategies

Clients Can Choose From a Variety of Hedge Fund Investment Strategies to Suit Their Needs

Denali Investment Strategy by CARL

Denali

Denali's investments in US stocks allow this strategy to preserve capital in down periods and react quickly during strong uptrends. This defensive approach blends low-risk affinity with long-term return goals to create revenue streams.

Strategy details

K2 Investment Strategy by CARL

K2

K2 blends behavioral finance and traditional valuation techniques to select stocks from the S&P 500. The fund strategy is quick to react to stock market ups and downs and aims at consistently generating profits.

Strategy details

Kilimanjaro Investment Strategy by CARL

Kilimanjaro

Energy, metals, agriculture - Kilimanjaro invests funds in futures spanning the entire commodities spectrum. Its market-neutral approach makes this strategy a perfect pairing with other uncorrelated or other more straight-forward strategies.

Strategy details

Olympus Investment Strategy by CARL

Olympus

Olympus uses three fully automated and complementary systems to generate returns. Unlike many hedge funds, this strategy takes full advantage of quant methods to generate revenue for its investors.

Strategy details

Victory Peak Investment Strategy by CARL

Victory Peak

Multiple systems compete for capital, emphasizing compound annual return while aiming to minimize drawdown. This strategy seeks to determine the current behavioral regime and apply capital only when the corresponding probabilities show a positive mathematical expectation.

Strategy details

Matterhorn

Matterhorn uses statistics to take advantage of the price actions of different securities. The strategy invests in financial instruments representing: US equities, US bonds and commodities.

Strategy details

El Capitan

El Capitan's fundamental philosophy is based on the selection of global markets with the greatest inflow of capital at the present time. The strategy uses quantitative decision making techniques that measure the strength of the market based on the flow of capital.

Strategy details

Fitz Roy

Fitz Roy's primary objective is to generate superior returns while minimizing risk. The Fund seeks to achieve its objective by taking advantage of a proprietary investment product designed to identify short-term investment opportunities in portfolio holdings.

Strategy details

Everest

A diversified, systematic multi-strategy vehicle, which aims to generate long-term absolute returns by creating layers of statistical agents across asset classes through different signals, universes and frequencies.

Strategy details

Our Service Providers

Where the “Smart Money” Is

Simply put, institutional investors are large-scale organizations that invest in stocks, funds, or any other investing opportunity to generate returns for their shareholders, members, clients, etc. Some typical examples of institutional investors are corporations, endowments, insurance companies, banks, and funds such as mutual funds or pension funds.

Due to their size and the sheer amount of capital they can muster, institutional investors typically buy and sell substantial positions, which has the potential to shift entire market environments. Other investors often follow the SEC filings of these more prominent investors to determine where to invest their own money.

This also means that these organizations can both act as institutional investors and receive investments from other organizations that act as institutional investors themselves. For example, one of the hedge funds in CARL's portfolio could theoretically decide to invest money into another hedge fund.

Who Is Considered an Institutional Investor?

Colloquially, any institution which invests money to generate returns for its members, shareholders, etc., could be considered an institutional investor. However, this is an oversimplification of the legal definition: According to the SEC, an "institutional investor" is any organization which holds accredited investor status. This means they are registered with the SEC and exempt from many of the regulations that usually limit institutions and private citizens regarding which assets they can invest in.

For example, in order to invest in hedge funds with CARL, private citizens and institutions are required to qualify as accredited investors. Once a private investor has qualified, they are typically referred to as an accredited investor, while an organization is an institutional investor. You will also often hear the terms "accredited institutional investor" or "qualified institutional buyer" to differentiate these organizations from any other organization which does not qualify as an accredited investor.

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How Do You Become an Institutional Investor?

Private citizens and institutions have very different ways to qualify for "accredited investor" status. Private investors need to hold specific professional certifications, have a net worth over $1,000,000 (excluding primary residence), have assets under management exceeding $1,000,000, or have an income exceeding $200,000 ($300,000 for married couples).

Meanwhile, institutions are typically defined as accredited investors by Rule 501 of SEC Regulation D:

  • "any bank as defined in section 3(a)(2) of the [Securities] Act"
     
  • "any savings and loan association or other institution as defined in section 3(a)(5)(A) of the [Securities] Act"
     
  • "any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934"
     
  • "any investment adviser registered pursuant to section 203 of the Investment Advisers Act of 1940 or registered pursuant to the laws of a state"
     
  • "any investment adviser relying on the exemption from registering with the Commission under section 203(l) or (m) of the Investment Advisers Act"
     
  • "any insurance company as defined in section 2(a)(13) of the [Securities] Act"
     
  • "any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that act"
     
  • "any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958"
     
  • "any Rural Business Investment Company as defined in section 384A of the Consolidated Farm and Rural Development Act"
     
  • "any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000"
     
  • "any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors"
     
  • "any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940"
     
  • "any organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, partnership, or limited liability company, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000"
     
  • "any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in § 230.506(b)(2)(ii)"
     
  • "any entity in which all of the equity owners are accredited investors"
     
  • "any entity of any other type "not formed for the specific purpose of acquiring the securities offered, owning investments in excess of $5,000,000"
     
  • "any “family office,” as defined in rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940 (17 CFR 275.202(a)(11)(G)-1)" holding AUM of more than $5,000,000, is not formed for the purpose of acquiring securities or whose investment is "directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment"

In short: The main legal differences between a private investor and an institutional investor are how they can attain status as an "accredited investor", which allows them to invest in hedge funds and many other financial products, assets, or investment vehicles.

Benefits for Institutions and Organizations Investing With CARL

Just like private investors, institutional investors interested in the CARL app's comprehensive investment tools and selection of quants need to show that they qualify as an institutional investor under any of the SEC's definitions outlined above. Once that's done, you will get full access to everything CARL has to offer, including some exciting investment strategies you may not have heard of yet.

As an institutional investor, you're probably keen to buy and sell substantial shares, but you'll also be pleased to know that our minimum investment is only $20,000 – which means if you're just looking to diversify your portfolio with some small-scale investments, you're free to do so with CARL. Pension funds and other organizations looking to invest their money wisely and with relatively low risk will also appreciate that quantitative hedge funds such as the ones CARL specializes in are an ideal investment vehicle: They typically aim for absolute return, no matter where the market's going, and they often excel in volatile market environments, meaning that your clients' money is well taken care of. Set up a CARL account today and have a look at what we can offer your institution.

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