Egan-Jones Recommends Shareholders Vote Against Sub-Adviser Change at XFLT
Egan-Jones Proxy Services has advised shareholders of the XAI Floating Rate & Alternative Income Trust (NYSE: XFLT) to vote against a proposal that would replace current sub-adviser Octagon Credit Investors with Rockford Tower Asset Management, a subsidiary of King Street Capital. The recommendation is based on concerns over insufficient evidence of underperformance and governance issues tied to the change. Egan-Jones argues that the proposed benchmark for evaluating performance does not align well with XFLT's investment strategy due to differences in asset allocation and leverage use. Additionally, while management fees would remain unchanged, the adviser’s share of those fees is set to increase. The firm also raised concerns about a lack of clarity regarding alternative candidates considered during the sub-adviser selection process. The Board has announced a tender offer contingent on approval of the new sub-advisory agreement and an arrangement with Bulldog Investors for proxy support under certain conditions, but Egan-Jones maintains its opposition. Shareholders are urged to consider whether this change would enhance long-term value.
Tickers: $XFLT
Topics: governance concerns investment trust proxy vote recommendation