The firm said the fund will seek a combination of high income with some long-term capital growth and will aim to outperform the FTSE World Europe Index and deliver a "healthy yield to investors".
Cazenove said that despite a backdrop of suppressed valuations and low growth expectations, the FTSE Eurofirst 300 is yielding 5% – twice that of German bunds.
It said there are over 100 stocks with yields in excess of their price per earnings ratios and the fund will aim to exploit these opportunities by investing in a relatively concentrated portfolio of 30 to 50 stocks.
James Sym, who has worked in the UK equities team at Cazenove since 2007 has also shifted across to the European equities team and will work closely with Rice in managing the new fund.
He has experience in equity income mandates, having worked alongside David Docherty and Matt Hudson on the UK income products.
Rice said: "The ongoing eurozone crisis presents a wealth of opportunities for income investors. With subdued growth and valuations at their lowest levels for 30 years, there is considerable demand for tangible direct returns on investment in the shape of dividends."
He added that the dynamic market in Europe would see them adopt a business cycle approach to managing the fund, investing in cyclicals during recovery phases of the market and defensives during a market slowdown.
"This approach should enable us to provide consistent and increasing levels of income for our investors with some capital growth in a range of market conditions,” Rice concluded.