The hedge fund manager and founder of Elliott Management Corp. argues that passive strategies don’t represent investing per se and that “index fund providers don’t have incentive to push companies to change for the better and create shareholder value.” This according to a recent Bloomberg article.

In his recent second-quarter letter, Singer refers to passive investing’s “apparent stability” as “unsustainable and brittle” and argues that “passive investing is in danger of devouring capitalism.” He asserts that in passive investing, small equity holders have “little-to-no voice and no realistic possibility of banding together, while the biggest shareholders have no (repeat, no) skin in the game so long as the money manager does not underperform the index by five-hundredths of a percentage point, in which case the customer calls up the money manager and starts yelling.”

The article outlines other takeaways from Singer’s letter, which include his thoughts on the Fed, the labor market, and China.

Note: Elliott (which manages $33 billion) is known for its activist and distressed-debt acquisitions, and recently made a bid to buy power distributor Oncor Electric Energy Delivery Co., thwarting Warren Buffett’s acquisition attempt to secure the deal.