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The European Opportunities fund will be an Ireland-domiciled alpha extension portfolio with 85-115 per cent net market exposure and the ability to short.

Marshall Wace hired Fehim Sever from Fidelity International last year to run the product alongside a Cayman Islands-domiciled global long/short equity fund.

Mr Sever previously ran long-only and alpha extension vehicles, producing a strong positive return, while benchmarks dipped below their starting levels.

As one of its research inputs, his European Opportunities fund will use Marshall Wace's trademark 'Tops' process, which involves polling broker salesforces worldwide about their stock recommendations to generate uncorrelated alpha.

The firm recently introduced early-warning risk indicators on Tops to "identify regimes in which risk taking is likely to be more or less rewarded", it said in a statement.

The change has been designed to make the system cope better with difficult market conditions such as those witnessed last year.

The launch has followed a period of turnover at Marshall Wace, during which the firm replaced its head of risk, withdrew a portfolio manager from its closed-end Tops fund and underwent a redemption offer and new private share issuance for internal investment.

It has also accompanied a period of wider change in the UK hedge fund industry, which has diversified into the Ucits world to combat massive redemptions and asset declines.

In a highly unusual move, hedge fund player GLG Partners boosted its funds under management earlier this year by buying retail manager Société Générale Asset Management UK.

The purchase came after GLG's net AUM fell by more than a third last year and neared its lowest permitted size under the firm's financial covenants.

Anthony Marber, head of investor relations at Marshall Wace, said the firm saw the convergence between the hedge fund and retail worlds continuing, particularly for hedge fund managers whose existing strategies suited the Ucits framework.

"We have not had to contort our strategies to fit into the Ucits wrapper," he said. "That is why we can create an additional Ucits arms to our business. Clearly, not everyone can embrace that trend."

Mr Marber said Marshall Wace had been running Ucits portfolios for 18 months and felt they satisfied the needs of a broad range of investors, including retail clients.

The European Opportunities fund will be only the second Marshall Wace Ucits product to feature retail share classes, after its Marshall Wace Tops Market Neutral fund.

Fund facts

Benchmark: MSCI AC Daily TR Net Europe Local index

Retail AMC: 1.7 per cent

TER: 180 basis points

Performance fee: 20 per cent

Liquidity: Weekly

Retail minimum investment: £20,000