Institutional investors are Virtus Investment Partners, Inc.'s (NYSE:VRTS) biggest bettors and were rewarded after last week's US$62m market cap gain

Key Insights

• Institutions' substantial holdings in Virtus Investment Partners implies that they have significant influence over the company's share price
• The top 8 shareholders own 50% of the company
• Insiders have sold recently

To get a sense of who is truly in control of Virtus Investment Partners, Inc. (NYSE:VRTS), it is important to understand the ownership structure of the business. With 83% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, institutional investors ended up benefitting the most after the company hit US$1.7b in market cap. The one-year return on investment is currently 14% and last week's gain would have been more than welcomed.

Let's delve deeper into each type of owner of Virtus Investment Partners, beginning with the chart below.

Check out our latest analysis for Virtus Investment Partners

What Does The Institutional Ownership Tell Us About Virtus Investment Partners?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Virtus Investment Partners. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Virtus Investment Partners' earnings history below. Of course, the future is what really matters.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in Virtus Investment Partners. BlackRock, Inc. is currently the largest shareholder, with 15% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 13% and 4.5%, of the shares outstanding, respectively. Furthermore, CEO George Aylward is the owner of 3.7% of the company's shares.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Virtus Investment Partners

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Shareholders would probably be interested to learn that insiders own shares in Virtus Investment Partners, Inc.. This is a big company, so it is good to see this level of alignment. Insiders own US$104m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 10% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Virtus Investment Partners you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com