The Investor Forum, brought about after the Kay Review, aims to bring about a "shift in the culture of equity markets".
The newly created body has officially begun its work this week with the aim of improving long-term returns from investment in companies.
Professor John Kay led an investigation into the market three years ago after problems were identified by Vince Cable, the Business Secretary.
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Mr Cable said: "I am delighted that, three years after I asked Professor John Kay to lead an investigation into 'short-termism' in financial markets, his recommendation of an Investors' Forum has been implemented.
"This is a welcome step towards more effective collective engagement by investors in UK companies.
"I hope that this new body will help bring about a shift in the culture of equity markets so they can support UK public companies to invest for the long term."
It needs to focus on harnessing widespread support in the immediate future, he added.
Prof Kay said: "The Investor Forum was central to the recommendations of the review and I am delighted to see it become reality.
"Asset managers working together can make a real contribution to improving the performance of British business."
The forum has today announced key appointments, with Simon Fraser becoming chairman and Andy Griffiths executive director.
Mr Fraser was formerly chief investment officer of Fidelity Worldwide Investment and is currently chairman of Foreign & Colonial Investment Trust and a non-executive director of Ashmore Group. He was also a non-executive director of Barclays.
Mr Griffiths has twenty years' experience as a top rated research analyst and investment expert at Capital Group, where he had specific responsibilities for investments in European banks and international equities.
He has strong relationships with the chief executives and management teams of the largest banks in the UK, Europe and Asia. He is currently a senior advisor to Corsair Capital.
Mr Fraser said: "In order to restore trust in the value of markets and their role in the economy, it is imperative that all investors take a long-term interest in the strategic direction of the companies they invest in.
"The Investor Forum will help facilitate better engagement between UK public companies and their shareholders to support long-term value creation opportunities."
Mr Griffiths said: "Our guiding principles will be rooted in value creation for investors and the pursuit of solutions which will ensure that the UK is a welcome home for many of the world's most dynamic enterprises."