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Russell Delroy is another one worth watching, He owns and runs Nero Resource Fund out of Cottesloe in Perth, and is fresh from sparking major change at the Kerry Stokes-backed Carnarvon Energy, a $400 million oil and gas prospect with assets off the coast of north-west Western Australia.

Russell Delroy, whose team is known for putting pitch books to chairmen and their boards.  
Delroy and his team are known for keeping chairmen and their boards on their toes. They often put together pitch books, much like investment bankers, encouraging small one-asset exploration/development-type companies to sell up rather than get into production.
Why does he do it? Often out of frustration.
“Many small-cap resource companies are single asset companies… they are built for exploration and development,” he says. “Should these companies really evolve into producers? Our argument is 99 times out of 100, the answer is no. That’s not a slight on management, they are just incredibly different propositions.”
Carnarvon Energy is one of those cases. He would argue it has good assets, in good areas, but those assets are better off as part of a bigger oil and gas producer’s portfolio.

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Delroy, like other activist investors we’ve interviewed in recent months, is value-oriented and big on capital allocation and alignment of interests. He doesn’t set out to roll boards, but doesn’t apologise for it either.
If he had his way, directors (not just executives) would have remuneration linked to shareholder returns, which he argues would sharpen boards’ focus on their primary job: creating value for investors.
“There seems to be this underlying ethos that equity ownership is misalignment and wage dependency is not. It is utterly bizarre; I find it staggering,” Delroy says.
“Skin in the game is essential, [and] that can come in many forms. If it is a founder like Chris Ellison at MinRes, that’s fantastic. But more often than not, these things aren’t led by founders.
“So, it has to be remuneration packages across the board. All of them (directors) need remuneration packages that reference shareholder outcomes. And that specifically should be around share price performance.”
They are the sort of comments that will have the wage-collecting directors club and perhaps even proxy advisers in a spin, not that Delroy will be too worried about that.

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So, it will be interesting to see what happens to the directors’ fees at Carnarvon Energy. Delroy joined the board in December’s clean-out; his first ASX-listed company board seat.
Carnarvon Energy’s old crew (excluding the MD) had no incentive or performance-based tests in their pay packets; the chairman’s fee is $200,000 a year, while the non-executive directors collect $100,000 each, according to the annual report.
Delroy’s Nero Resource Fund is reasonably small in the context of the wider Australian equity capital markets. He says his fund has five staff, oversees $155 million, mostly on behalf of his early backers, and has returned 24.8 per cent a year since inception a decade ago.
But he talks sense. And now that he has popped his head up at Carnarvon Energy, and given the way the markets are trading, we should expect to see him around a bit more.