Paul Singer Says Passive Investing Is ‘Devouring Capitalism’

With the massive capital flows into passive strategies, the active/passive debate has become a popular topic in invest letters. Most recently, Paul Singer of Elliott Management wrote about the possible dangers of the growing share of passively managed assets:

“Passive investing is in danger of devouring capitalism,” Singer wrote in his firm’s second-quarter letter dated July 27. “What may have been a clever idea in its infancy has grown into a blob which is destructive to the growth-creating and consensus-building prospects of free market capitalism.”

Singer also touched on a range of other topics in his new letter:

In a wide-ranging letter that touched on topics from safe spaces to infrastructure spending, Singer said the fund was trying to navigate "uncharted waters" amid continuing accommodative monetary policy.

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Paul Singer Says Passive Investing Is ‘Devouring Capitalism’