Terry Smith, the prominent fund manager behind the £12.7bn Fundsmith Equity Fund, has reportedly divested his entire holding in Magnum Ice Cream. The sale, confirmed in the firm's latest factsheet, occurred in May, less than six months after the ice cream division was demerged from consumer goods giant Unilever and made its public debut in December.
This latest move by Smith severs his final investment ties with Unilever, a company his fund had held for over 15 years. It follows his earlier decision in April to offload his substantial stake in Unilever itself, which at one point made him a top 10 shareholder. Smith publicly criticised Unilever for what he perceived as a departure from its core operational focus, instead pursuing activist-driven corporate restructuring.
Unilever's strategic overhaul, announced in 2024, aimed to streamline its portfolio by divesting underperforming divisions and concentrating on more profitable 'power brands'. As part of this reorganisation, the company also merged its food division with spice giant McCormick in April, a £34bn deal that drew further criticism from some long-standing investors who were reportedly caught off-guard and would inherit a 65% stake in the newly merged entity without a shareholder vote.
The demerged Magnum Ice Cream Company, which also includes brands like Ben & Jerry's and Wall's, has experienced a turbulent start as a standalone entity. Despite entering its traditionally strongest sales period, it recently became the most shorted stock in Europe. However, its shares have seen a significant uplift, rising by approximately 38% since reports of interest from private equity firms Blackstone and CD&R emerged, and are now trading 7% above their initial public offering price.
Beyond Magnum, the Fundsmith factsheet also revealed Smith's decision to exit positions in New York-listed elevator manufacturer Otis and animal pharmaceutical company Zoetis. The capital from these divestments is reportedly being channelled into a new, as yet unnamed, investment position as Fundsmith seeks to accumulate its desired weighting.