I worked for a company called Corel early in my career and we were taken private by a private equity firm. We had about $95 million in the bank and they bought us for around $130, so they used our own money to buy them. When the takeover was done the money was taken to pay back the banks for the short term loans.
The company changed and I left. I thought Vector was the worst PE firm ever. Now to be fair they don't have a great reputation at all due to their buy, strip, merge and flip tactics have caught up to them.
On the other side of the coin we've published short reports on companies and had that set off a wave of harassing phone calls about how we were the worst people on earth and why did we want to ruin everyone's life.
And this was a case where we were right, the company finally did admit that the items we highlighted in our short report were correct.
If you come out on the "I don't like these types of funds and their tactics" side, then ask your self what is the appropriate measure when you find a company that is under performing, or is down right corrupt with its books, or is just coasting.
What should the correct response be?
1) Build up a position in the firm so the fund has skin in the game?
2) Then ask for changes to be made?
3) Then ask for the management who was responsible for the under performance to leave so this doesn't happen again?
To me that all seems very reasonable and is the typical playbook of a firm like Elliot.
The very reason passive investing works is that there are firms out there in the market buying the good stocks and shorting the bad ones.
It seems a bit much to on one hand claim people should be passive investors which requires active investors to price the market and on the other hand get mad when an active investor points out flaws in a company and correspondingly asks a company to fix those flaws.
TL/DR
It's shitty when someone comes along and points out your flaws. It's often the low level employees, who aren't really at fault, who pay the highest price. On the other hand you can't just expect to become CEO and be able to run a company into the ground without someone complaining.