{"id":982613,"date":"2026-07-18T08:33:11","date_gmt":"2026-07-18T12:33:11","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/what-every-xflt-shareholder-needs-to-know-for-xflts-proxy-contest\/"},"modified":"2026-07-18T08:33:11","modified_gmt":"2026-07-18T12:33:11","slug":"what-every-xflt-shareholder-needs-to-know-for-xflts-proxy-contest","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/what-every-xflt-shareholder-needs-to-know-for-xflts-proxy-contest\/","title":{"rendered":"What Every XFLT Shareholder Needs to Know for XFLT’s Proxy Contest"},"content":{"rendered":"
\n

\n Fees Will\u00a0<\/em>
\n
\n
\n NOT<\/u>
\n <\/em>
\n <\/strong>
\n Increase If Proposal Is Approved<\/em>\n <\/p>\n

\n Terminated Sub-Adviser Octagon\u2019s \u201cProven Investment Team\u201d Responsible for -54% NAV Erosion at XFLT and Seven CLO Defaults Across Its Own Portfolio<\/em>\n <\/p>\n

\n XFLT Asks Shareholders to Vote on the WHITE Proxy Card \u201cFOR\u201d the King Street Sub-Advisory Agreement at Special Meeting on July 30, 2026 <\/em>\n <\/p>\n

CHICAGO, July 18, 2026 (GLOBE NEWSWIRE) — XA Investments LLC (\u201cXAI\u201d), manager of XAI Floating Rate & Alternative Income Trust (XFLT) (the \u201cFund\u201d), responded to misleading claims regarding the approval of a new investment sub-advisory agreement among the Fund, XAI and Rockford Tower Asset Management, L.L.C. (the \u201cKing Street Sub-Adviser\u201d), a wholly owned subsidiary of King Street Capital Management, L.P. (\u201cKing Street\u201d) at the upcoming Special Meeting of Shareholders on July 30, 2026.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n
\n Terminated Sub-Adviser\u2019s FALSE Claims<\/strong>\n <\/td>\n\n The TRUTH<\/strong>\n <\/td>\n<\/tr>\n
Octagon claims the approval of King Street as Sub-Adviser will increase the fees paid to XA Investments.<\/td>\n\n
    \n
  • \n
    \n There will be NO increase in fees paid by shareholders. <\/u>
    \n <\/strong>
    \n The Fund\u2019s management fees and expenses will <\/u>
    \n
    \n not<\/u>
    \n <\/strong>
    \n increase, and shareholders will <\/u>
    \n
    \n not<\/u>
    \n <\/strong>
    \n pay any higher fees because of this change<\/u>.<\/li>\n<\/ul>\n
      \n
    • In fact, under the proposed agreement with the King Street Sub-Adviser, if the Fund recovers the abysmal -54%<\/u><\/strong> NAV erosion suffered under the terminated sub-adviser’s mismanagement, XA Investments will stand to earn less in fees than it would under the current arrangement.<\/strong><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Octagon claims it has a \u201cbetter path forward\u201d because it offered to take over your Fund as investment adviser and reduce the Fund\u2019s advisory fee.<\/td>\n\n
    \n
  • \n
    \n This proposal is<\/u>
    \n <\/strong>
    \n
    \n not on the ballot<\/u>
    \n <\/strong>. A vote against the King Street Sub-Advisory Agreement does not<\/u><\/strong> make the terminated sub-adviser the Fund\u2019s adviser.<\/li>\n<\/ul>\n
      \n
    • The terminated sub-adviser\u2019s proposal was an attempt to take over as adviser of XFLT\u2014a role it has not performed for any registered fund.<\/strong><\/li>\n<\/ul>\n
        \n
      • \n Octagon would be getting a promotion and a pay raise under this \u201cbetter path.\u201d <\/strong>Rewarding an underperforming manager with expanded responsibilities and higher fees would have been imprudent and contrary to the Board’s fiduciary duty to act in shareholders’ best interests.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Octagon implies that XA Investments and the Board are not aligned with shareholders.<\/td>\n\n
    \n
  • \n The leadership team at XA Investments and the Fund Board all have material ownership of XFLT<\/strong> and are aligned with XFLT shareholders. Collectively, XA Investments’ management and the Fund Board own approximately 272,859 shares of XFLT.<\/li>\n<\/ul>\n
      \n
    • The terminated sub-adviser is not aligned with shareholders, and Octagon senior leaders own far fewer shares of XFLT, including CEO and former XFLT Portfolio Manager Gretchen Lam<\/strong>.<\/li>\n<\/ul>\n
        \n
      • Like every other shareholder, the leadership team at XA Investments shared in the value destruction that has occurred under Octagon\u2019s watch.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Octagon\u2019s claims its management of XFLT by a \u201cproven management team\u201d led to performance that was \u201cadmirable.\u201d<\/td>\n\n
    \n
  • \n The results tell a different story. <\/strong>The underperformance is far from \u201cadmirable.\u201d As of March 31, 2026, XFLT underperformed its benchmark by
    -19.09%<\/u><\/strong> over the past one-year period, underperformed over the three-year, five-year and since-inception periods, and NAV per share declined approximately
    -54%<\/u><\/strong>, which implies $406.7 million<\/u><\/strong> of current-share-equivalent NAV erosion.<\/li>\n<\/ul>\n
      \n
    • \n The results are why the Board acted.<\/strong> The Board had a fiduciary responsibility to protect shareholders from the terminated sub-adviser\u2019s persistent underperformance at XFLT and commenced a search process to identify a qualified sub-adviser that could improve future shareholder outcomes.<\/li>\n<\/ul>\n
        \n
      • \n Recent developments affirm that the Board was right to be concerned.<\/strong> In 2026 alone, Octagon\u2019s own CLO portfolio has suffered seven CLO defaults in 2026 alone.<\/u><\/strong><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Octagon claims the Board did not conduct proper diligence in selecting the King Street Sub-Adviser.<\/td>\n\n
    \n
  • \n The Board was unanimous in its conviction that XFLT would benefit from the expanded capabilities of the King Street Sub-Adviser.<\/strong>\n <\/li>\n<\/ul>\n
      \n
    • The Board carefully evaluated King Street\u2019s relevant private and institutional 30-year track record, its CLO and credit business, talent, investment resources, strategy fit and ability to manage XFLT dynamically within its existing mandate.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
King Street\u2019s performance, experience and capabilities are being distorted.<\/td>\n\n
    \n
  • \n King Street is a leading global alternative asset manager<\/strong> with a 30-year track record, $30 billion in assets under management and a strong CLO platform that includes: <\/p>\n
      \n
    • 20 U.S. CLOs<\/li>\n
    • 9 European CLOs<\/li>\n
    • Approximately $12 billion in CLO assets under management.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
        \n
      • \n XA Investments and the Fund\u2019s Board believe the King Street Sub-Adviser will be better positioned to improve performance, support stronger distributions over time and help unlock greater value for XFLT shareholders<\/strong>.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Octagon claims it has served as a close partner of the Fund since its IPO in 2017, and it has been responsible for the day-to-day management of the Fund\u2019s portfolio for nearly a decade thereafter.<\/td>\n\n
    \n
  • \n If Octagon wants credit for the day-to-day portfolio management of the Fund, it must also accept responsibility for the poor performance results<\/strong>.<\/li>\n<\/ul>\n
      \n
    • As of March 31, 2026, the Fund had suffered -54%<\/u><\/strong> NAV erosion since inception and underperformed its benchmark by –<\/u>19.09%<\/u><\/strong> over one year and –<\/u>4.30%<\/u><\/strong> over three years. These results were key to the Board\u2019s review, and the Board determined that terminating Octagon was warranted.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Octagon claims to have grown increasingly concerned that key decisions about the Fund were being made by a Board that was not fully informed, to the detriment of shareholders.<\/td>\n\n
    \n
  • \n Nothing could be further from the truth.<\/strong> This statement reveals a fundamental and alarming misunderstanding of the sub-adviser role and proper fund governance.<\/li>\n<\/ul>\n
      \n
    • Decisions that impact all shareholders call for careful judgement and decisive action by an independent board of trustees. And that is exactly what the Board did.<\/li>\n<\/ul>\n
        \n
      • Shareholders do not benefit from second guessing by an underperforming sub-adviser.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Octagon believes the King Street Sub-Advisory Agreement represents a \u201csignificant change\u201d to the Fund\u2019s portfolio management without a justifiable benefit or explanation of the Board\u2019s decision to replace the terminated sub-adviser.<\/td>\n\n