Heavily reddened type 1 quasars at z > 2 I: Evidence for significant obscured black-hole growth at the highest quasar luminosities

We present a new population of z>2 dust-reddened, Type 1 quasars with 0.5<E(B-V)<1.5, selected using near infra-red (NIR) imaging data from the UKIDSS-LAS, ESO-VHS and WISE surveys. NIR spectra obtained using the Very Large Telescope (VLT) for 24 new objects bring our total sample of spectroscopically confirmed hyperluminous (>10^{13}L_0), high-redshift dusty quasars to 38. There is no evidence for reddened quasars having significantly different H$\alpha$ equivalent widths relative to unobscured quasars. The average black-hole masses (~10^9-10^10 M_0) and bolometric luminosities (~10^{47} erg/s) are comparable to the most luminous unobscured quasars at the same redshift, but with a tail extending to very high luminosities of ~10^{48} erg/s. Sixty-six per cent of the reddened quasars are detected at $>3\sigma$ at 22um by WISE. The average 6um rest-frame luminosity is log10(L6um/erg/s)=47.1+/-0.4, making the objects among the mid-infrared brightest AGN currently known. The extinction-corrected space-density estimate now extends over three magnitudes (-30 < M_i < -27) and demonstrates that the reddened quasar luminosity function is significantly flatter than that of the unobscured quasar population at z=2-3. At the brightest magnitudes, M_i < -29, the space density of our dust-reddened population exceeds that of unobscured quasars. A model where the probability that a quasar becomes dust-reddened increases at high luminosity is consistent with the observations and such a dependence could be explained by an increase in luminosity and extinction during AGN-fuelling phases. The properties of our obscured Type 1 quasars are distinct from the heavily obscured, Compton-thick AGN that have been identified at much fainter luminosities and we conclude that they likely correspond to a brief evolutionary phase in massive galaxy formation.