Typically, institutional investors are the principal investors in an IPO. Retail investors may participate, however, for example through an offering through intermediaries or established retail investor platform, particularly if the company is well-known to the public. Smaller IPOs are likely to include only institutional investors.
Institutional investors are typically investment funds, pension funds and hedge funds, which may be located anywhere in the world, including in the United States (see “What about the US? Why is it relevant?”).