What is the term for financial firms that raise funds to invest in loans and securities?

The correct term for financial firms that raise funds to invest in loans and securities is "Investment institutions." These institutions play a crucial role in the financial system by pooling resources from various investors and redistributing those funds into investments like loans, stocks, and bonds. Investment institutions can take various forms such as mutual funds, hedge funds, and private equity funds, effectively channeling capital toward productive avenues in the economy.

In this context, investment institutions are characterized by their focus on generating returns for their investors through wisely selected investments. They conduct detailed analysis and leverage market opportunities to manage risk and optimize performance in their portfolios.

While holding companies, securities firms, and asset management companies are indeed financial entities, they operate under different frameworks. Holding companies primarily exist to own shares in other companies and do not typically engage directly in investment activities. Securities firms focus on the buying and selling of financial securities and may not necessarily be involved in the investment of pooled funds. Asset management companies, on the other hand, manage investments on behalf of clients but the term "investment institutions" more directly captures the broader act of raising and investing funds.