Stock market-listed investment trust Law Debenture is a strange beast.It is part a conventional investment portfolio and part a legal business owned by the trust.

Although it is unlikely that such a combination would get off the ground today as an investment entity, it works as evidenced by the fact that it has been chugging along – very nicely thank you – for more than 133 years.

Change is simply not an option. Both the investments – managed by James Henderson and Laura Foll at Janus Henderson – and the legal business IPS (Independent Professional Services) are good for each other.Crucially, it works for the trust’s shareholders.

A few days ago, the £1 billion trust announced its 2022 financial results. While one year only gives a snapshot, it was a satisfactory set of numbers.

Although total returns for shareholders were meagre at 0.4 per cent, it delivered income in spades.During the year, it paid dividends totalling 30.5 pence a share, a 5.2 per cent increase on the year before.

It means the trust has clocked up 13 years of annual dividend growth – and 44 years of maintaining or increasing dividends.

All rather impressive, although the longer-term numbers look better.Over the past five years, the trust has delivered total shareholder returns of 82 per cent.

To put this into perspective, the FTSE All-Share Index has registered a return of 31 per cent over the same period.

The impact of IPS on the trust’s performance cannot be under-estimated.A big chunk of the income that the trust generated last year – 30 per cent – stemmed from IPS, a firm that has its fingers in many pies.

It makes its dosh from providing company secretarial services to big companies (in effect, ensuring corporates are doing everything by the book); acting as both a corporate bond and pension fund trustee; and providing whistleblowing services to companies, allowing employees to report corporate wrongdoing in confidence.

It’s a business mix that has delivered revenue growth through thick and thin (Covid, takasifun inflation and Liz Truss).

Accounting for a fifth of the trust’s assets, it provides a sound bedrock around which Henderson and Foll can build a complementary investment portfolio.

That portfolio comprises 145 stocks, most of which are listed in the UK.It includes the usual dividend-producing suspects – the likes of BP and Shell and banks Barclays, HSBC, Lloyds and NatWest – but a lot more besides.

Henderson, speaking to me from Kenya where he was busy enjoying encounters with elephants rather than his usual fare of FTSE 100 chief executives, defends the diverse portfolio on the grounds of risk mitigation.

‘If any company I hold cuts its dividend,’ he told me, ‘it’s not an issue.For example, when BP cut its dividend in 2020, it didn’t impact on the income Law Debenture was able to pay out to investors.

‘Indeed, the trust increased its dividend by 5.8 per cent.’ The rich income that IPS provides for the trust also allows Henderson to invest in companies in anticipation of them paying a dividend – for example, the banks in 2020.

It also permits him to invest a tiny slice of the portfolio in smaller companies that generate no income whatsoever – the likes of renewable energy company Ceres Power and oil and gas exploration company Deltic Energy.

Although both companies are currently loss making and have yet to pay any dividends, Henderson is sure they will prove shrewd investments – even if taken over by rivals.

Last week, I asked Denis Jackson, chief executive of Law Debenture, whether the trust would ever sell IPS, potentially generating a windfall for shareholders.He said it was a no-go. His view is that it’s a marriage made in heaven that has worked for 133 years – and he sees no reason why it can’t work for another 133.

Providing an annual income of around 3.6 per cent, plus the prospect of capital gains, Law Debenture represents a sound entry point for investors wanting exposure into the UK stock market.

Slightly quirky, yes.But potentially rewarding on a five-year time horizon. In investment terms, more of a Kenyan elephant (solid and dependable) than a tiger (volatile).

Now banks bulldoze services

Banks may be awash with dividends, but they’re rapidly depleting their arsenal of branches.A total of 722 have been shut – or put on notice of impending closure – since the start of last year and plenty more for sure will go before the end of the year is out.

Of those branches that remain, many of their services are being undermined by having their opening hours reduced. 

Even more disturbingly, access to counter-based services (for example, to pay in a cheque or make a cash withdrawal) is being restricted, forcing customers to use an ATM, paying-in machine or go online.

<div class="art-ins mol-factbox money" data-version="2" id="mol-a9f4f450-bb3f-11ed-b496-2f1ca73e786d" website PRESTRIDGE: Law Debenture is big beast of investment jungle