This work studies how the concentration of ownership among institutional investors influences price informativeness in financial markets. We find that an increase in institutional ownership concentration — whether measured by investors’ assets under management (AUM) or their firm-level holdings — reduces price informativeness as well as investment-to-price sensitivity. This negative effect is attributed to the learning and trading decisions of active, rather than passive, investors. To establish causality, we utilize a setting involving mergers between active investors, and our results remain consistent across both U.S. and international contexts.