This report is the second in our series on decarbonising the built environment. While our first report focused on building materials, this report tackles two of the sector’s most critical and emissions-intensive inputs: cement and steel. Together, these materials account for approximately 16% of global CO2 emissions and sit at the heart of modern construction. They are also difficult to decarbonise as their respective production processes are heat intensive, assets are long lived and margins are typically thin. Regulation, customers and capital are increasingly pushing for lower-carbon materials and new technologies are emerging, including clinker substitution and carbon capture in cement, and greater scrap use, electrification and hydrogen-based routes in steel. The investment cycle will mean that the transition takes time, but materials producers will need to adapt.

The Law Debenture Corporation (LWDB) is a UK investment trust, with a long history, dating back to 1889. It is one of largest constituents of the Association of Investment Companies’ UK Equity Income sector and targets long-term capital growth and steadily increasing income. Unlike other investment trusts, alongside its investment portfolio it includes an operational business, a leading provider of independent professional services (IPS). The combination is a well proven model which has delivered strong and consistent long-term performance.

There are four key reasons why LWDB represents a compelling investment case:

1. LWDB’s unique structure has been key to its strong long-term performance.
2. IPS underpins the stable growth of LWDB.
3. The portfolio invests in companies of all sizes with around 150 stock holdings.
4. LWDB has a strong track record of outperformance and dividend growth.

For more information on LWDB, please see our website.

In this episode, our director of content, investment trusts Milosz Papst provides an overview of Law Debenture Corporation which aims to achieve a higher rate of total return than the broad UK stock market through investing in a diversified portfolio of primarily UK equities. He discusses the unique symbiotic relationship between the company’s investment portfolio and its independent professional services (IPS) business and how this drives performance. The regular flow of income that IPS generates, well ahead of its share of net assets, provides the portfolio managers with much greater freedom to balance the requirements for immediate income with the goal of growing capital values over time. He also comments on the company’s recent interim results, with a strong absolute and relative performance from the portfolio and continued growth in IPS. He elaborates on the main contributors to performance, including Rolls-Royce which is a good example of how Law Debenture Corporation can successfully invest in companies not paying a dividend at the time of investment thanks to the regular income from IPS. Finally, he discusses the company’s current portfolio positioning as sentiment towards UK equities begins to improve.

Listen on your preferred podcast player below:

• Apple Podcast
• Spotify
• YouTube
• Zencastr

About Uncovering Trusts: Uncovering Trusts is a podcast run by Edison analysts, which is released every two weeks. Subscribe to hear analyst interviews on how investment trusts maximise returns while managing risks for investors.

Law Debenture’s unique structure has generated an impressive record of long-term performance and dividend growth, evident in its recently published results.

In this webinar, LWDB is represented by its CEO, Denis Jackson, and Laura Foll, who co-manages the investment portfolio alongside James Henderson, both from Janus Henderson Investors. They discuss the trust’s unique structure, how this has contributed to its strong performance record, and recent developments.