In a letter sent to investors in July 2011 RWC said only that it had made the decision to soft close the £350m RWC Europe Absolute Alpha "in the interests of existing investors".
For the past year the fund has only been accepting investments if there is a specific agreement in place in advance of the trade being made.
The contrarian opportunities RWC sees on offer in Europe now are the chief reason for re-opening the fund.
Gambhir said: "While we cannot say that the European tail-risks have disappeared, we do believe they are diminishing. Even if equity markets correct, we are entering a period where markets will be less dysfunctional; earnings and valuations will begin to drive share prices. We are particularly excited about the opportunities for stock picking and alpha generation as this process unfolds.
Investors now have a 35% underweight in Europe, according to the most recent Bank of America Merrill Lynch fund manager survey, and the market is between 10% and 50% cheaper than other regional markets.
"A re-allocation of assets to Europe is overdue as investors’ concerns re-focus on the US fiscal debt and slowing growth in China," said RWC.
The strategy behind RWC Europe Absolute Alpha aims to make returns from both its long and its short book and over the past 10 years has returned investors approximately 137%with volatility of 8%, compared to returns of 37% from the equity index with double the amount of volatility, the firm said.
The Ucits fund was launched in 2010 and is up over 7.3% since inception against the MSCI Europe Index, which is up 0.7% over the same period.
Dan Mannix, head of business development at RWC, said: "The debate on how to classify UCITS absolute return funds is distracting investors from some really interesting investment opportunities found within long short equity strategies.
"Not only are certain parts of the European equity universe starting to look compelling from a valuation perspective but the dislocation within the asset class allows a long short investor to take advantage of it from both sides."
