NORWAY – The NOK1.2trn (€147bn) Government Pension Fund – Global may be expanding its derivatives operations.

Norges Bank Investment Management, which runs the former Petroleum Fund, is currently looking to recruit a derivatives operations manager based in Oslo.

Responsibilities include “the administration and development of the derivatives operations infrastructure, in particular linked to the control and operational risk aspect,” according to the Norges Bank website.

The fund declined to confirm, deny or comment when asked about the significance of the appointment. “It is not our policy to answer these sorts of questions,” said a spokesperson.

However, IPE understands that more will be revealed on the matter at the time of the fund’s annual report and press conference at the end of February.

It comes as a leading economist has questioned the fund’s investment strategy in the current low bond yield environment. London Business School professor Elroy Dimson said: “Real assets are being depleted and reinvested in financial assets.

“If the risk-free return on financial assets is effectively zero (after fees etc), the real reward for converting from oil to the inflation-index basket is small. This obviously ignores diversification from one commodity (oil) to many.”

He explained the fund has a horizon like the maturity of the longest (and lowest yielding) inflation linked bonds.