A mutual fund that targets high value investors e.g. institutional investors, pension funds and endowment trusts. These types of funds operate with low fees, but have high minimum investment requirements, sometimes above $1 million.
Additional meaning of Institutional Fund:
Institutional funds belong to the most diversified funds as they invest in hundreds of different securities. Using this investment policy they can reduce risk. They do not trade securities very often, so their operating costs are not high.