The trust that's paid 51 years and counting of rising dividends - and invests round the world cheaply

Investment trust Alliance has been making money for shareholders for 130 years.

It has a loyal private investor following, many drawn in by the trust's commitment to paying a rising dividend.

Bar an almighty disaster, it is well on course to delivering its 52nd year of consecutive dividend increases – a record bettered by only one other fund (City of London).

But Alliance is much changed from the investment trust it was just two years ago. This is a result of 'activist' shareholder Elliott, an institutional investor, which felt the trust's previous internal managers were not delivering the goods.

Although Elliott has now sold its stake at a tidy profit, its legacy lives on. The boardroom has been refreshed, the chief executive removed, and a number of subsidiary businesses (an investment management arm and a fund platform) sold.

But the most radical change has been on the investment management front. While technically still managed out of Dundee, the £2.6 billion fund has parcelled out its portfolio to eight external investment houses to manage.

In investment speak, the trust has gone multi-manager – basing its fortunes and those of shareholders squarely on the heads of the selected managers.

While still early days, it seems the new investment approach is bedding down nicely. Clare Dobie, a non-executive director of the trust, says: 'Initially, there was a lot of surprise at the change. But shareholders are coming round as they become more familiar with the new investment strategy.'

The managers selected to run a slice of the trust's assets come from a mix of UK and overseas-based investment houses.

So, in the UK, Jupiter, River and Mercantile and Veritas.

Among the international managers are Canadian based Black Creek, Lyrical Asset Management (New York) and First Pacific Advisors (Los Angeles).

The managers are overseen by financial consultants Willis Towers Watson whose job is to monitor their performance and replace them if they are not up to scratch.

So far, no changes have been made although Willis's chief investment officer Craig Baker says he will not hesitate to fire and hire if it is in the best interests of shareholders.

He says: 'I start each working day asking myself one question: 'Are these the best managers?'.'

Each manager runs a parcel of no more than 20 stocks. The only exception is GQG which additionally manages a 40-strong portfolio of emerging market shares. The result is a trust with broad exposure to a range of equity markets and sectors.

Surprisingly, there is little overlap in companies held. Three managers have positions in two of the trust's biggest holdings – Alphabet and Microsoft – but the largest stake overall represents a modest 2.4 per cent of Alliance's portfolio. Baker says no shareholding will exceed five per cent.

Dobie is thrilled with the overhaul. She says: 'What we are doing is asking some of the world's top managers to run with their best ideas. It is all rather unique.'

But global trust Witan is run in a similar multi-manager way with 10 managers running chunks of the trust's portfolio.

Since the new investment approach was adopted, Alliance's shares are up in price by eight per cent – a return better than the FTSE All-Share Index. But it is far too early to call the overhaul a success.

One reassuring fact is that the trust's overall annual charge remains modest with the board determined to keep it below 0.65 per cent.