Much has been said and written about the poor returns achieved by many active fund managers for their clients. Some critics focus on high expense ratios, but my experiences over the past 30 years as a director of seven quoted British companies suggest there is a deeper problem.

Most of the fund managers I have encountered lacked in depth knowledge of my companies, which ranged from members of the FTSE 250 to an Aim-quoted group, because they simply did not exert themselves. Rather than conduct rigorous due diligence before investing, they seldom left their offices. Instead they relied on weak and frequently partisan analysis provided by brokers’ analysts, or on a 45-minute sales pitch by the investee company’s chief executive and finance director.

I cannot recall even one fund manager asking to visit our operations or meet more executives before investing. They therefore became shareholders in companies that they barely understood. Once in, few fund managers put in much effort to get to know us better.