XA Investments earlier this week (30 June) held a webinar asking shareholders to approve a significant restructuring of listed closed-ended fund XAI Floating Rate & Alternative Income Trust (XFLT) and interval fund XAI CLO & Income Opportunities Fund (OCTIX). This involves replacing sub-adviser Octagon Credit Investors — which has put up resistance — with Rockford Tower, a King Street Capital Management affiliate, broadening the funds’ investment mandate, and reducing management fees in a bid to revive performance.
XAI is proposing to replace Octagon with Rockford Tower after years of underperformance and net asset value erosion, the board said on a webinar 9fin attended. Octagon issued its own statement defending its performance and questioning Rockford Tower’s credentials as “a newly formed entity with no operating history”, adding that parent King Street “has never managed a closed-end fund.”
Octagon’s proxy materials for XFLT on Monday (29 June) escalated the dispute, revealing that it had offered to replace XAI as adviser to XFLT, cut the fund’s advisory fee by more than 20% and absorb proxy costs, only to be rejected by the board within a day. The filing also alleges that XAI repeatedly ignored or failed to pursue strategic initiatives proposed by...
