Britain's Terry Smith made public for the first time on Thursday why his fund dumped its Diageo stake last year, citing problems with its new management and early signs that weight loss drugs threatened the drinks sector.

British fund manager Terry Smith has sold his stake in Diageo Plc, citing concerns about the management of the drinks company and its vulnerability to soaring demand for weight-loss drugs.

In a letter to investors, Smith (pictured) said he had sold his Fundsmith Equity fund's shares in Diageo after holding the stock for almost 15 years.