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AA-rated Lofthouse: 'maverick' tobacco settlements won't stop M&A

Ben Lofthouse, Citywire AA-rated manager of the Henderson International Income trust, believes nothing can stand in the way of consolidation in the tobacco sector.

It has been buoyed of late by M&A activity, but on the other hand Reynolds American - Lofthouse's top holding - was hit earlier this month by a £14 billion damages award.

Lofthouse argues that the amount - set by a 'maverick' court - is likely to be reduced on appeal and does not change the 'end game' of consolidation in the industry, which is delivering earnings growth while top-line revenues are declining.

Henderson International Income has returned 37.2% in net asset value terms over the past three years, compared with a 31.7% rise in the FTSE World index.

On his open-ended Henderson Global Equity Income fund, Lofthouse has generated 40.7% through the same period, a top-quartile performance in a sector where the average fund has produced 28.1%.

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