Norway\'s oil fund has increased its investments in small-capitalisation companies in debt-burdened European countries such as Italy and Greece over the past 18 months, the head of the $544 billion (Dh2 trillion) fund said. \"We think it\'s structurally possible to make money\" in these markets, Yngve Slyngstad, chief executive officer of Norges Bank Investment Management, said in a speech yesterday in Oslo. The fund also handed out external investment mandates targeting small-caps in France, Spain, he said. The Government Pension fund Global, Europe\'s largest equity investor, last month reported its smallest quarterly gain in a year, returning 0.3 per cent as its stocks fell 0.7 per cent in the second quarter. The fund, which reduced its bond holding to the peripheral euro-area members during the three months through June, may also struggle in the third quarter after a global stock market rout slashed the value of global equities by about $5.7 trillion in August. The MSCI Italy Small Cap index has lost 10.8 per cent this year, compared with a 25 per cent loss for the benchmark FTSE MIB Index. The MSCI Greece Small Cap has plunged 32 per cent this year, the same as the decline for the benchmark ASE index. Article continues below European leaders are still struggling to contain a sovereign debt crisis that started in Greece last year. At the same time, Standard & Poor\'s August 5 downgrade of the US deepened a global equity slump, threatening recovery outlooks in Europe and the U.S. The fund at the end of the second quarter had 199 billion crowns ($37 billion) of its stocks externally managed and in total 6.8 per cent of its assets were managed externally. The investors said earlier this year in its annual report that it handed out 14 specialist stock mandates in 2010, including in Greece, Spain and Italy. The fund is built from taxes on oil and gas, ownership of petroleum fields and dividends from its stake in Statoil. It got its first capital infusion in 1996 and has been taking on more risk as it expands globally.