Threadneedle, the UK-based fund manager, has added a UCITS III fund focusing on smaller European companies to its range.

The Threadneedle (Lux) European Smaller Companies Absolute Alpha Fund is managed by Philip Dicken, who has over a decade of experience in single strategy hedge funds. He and his team will be given freedom as to fund strategy and positioning, the firm said in a statement.

Threadneedle’s head of distribution, Campbell Fleming, said that the firm had spoken extensively to its client base and had seen a great appetite for a product aimed at capitalising on the European smaller companies investment market in this form.

The fund, which launched yesterday, carries 1.5 per cent annual management charge and a 20 per cent performance fee (for that over a three-month Libor cash hurdle rate).