The founder of the fund that forced its way on to Microsoft’s board is warning investors piling into similar activist hedge funds that they could be disappointed as more companies pre-empt activist attacks with shareholder-friendly policies.

Jeffery Ubben, who runs the $12bn ValueAct Capital hedge fund, said soaring stock markets were also tempting more funds to set themselves up as “drive-by activists” focused on trying?to?make?short-term?gains.

His comments, in an interview with the Financial Times, come as investors put record sums into activist hedge fund strategies despite returns that have fallen far short of big equity markets this year. According to Hedge Fund Research, activist funds re-turned 14.4 per cent to the end of November against 27 per cent for the S&P 500 and 18 per cent for the FTSE All-World, although the average masks wide disparity between the best and worst performing funds.