XA Investments President Kimberly Flynn Dispels Misinformation Ahead of XFLT Proxy Vote
Rhea-AI Summary
XAI Floating Rate & Alternative Income Trust (NYSE:XFLT) is asking shareholders to approve a new investment sub-advisory agreement among the Fund, XA Investments and Rockford Tower Asset Management, a King Street subsidiary, at a Special Meeting on July 30, 2026.
According to XAI President Kimberly Flynn, the Board removed former sub-adviser Octagon after XFLT’s NAV per share declined about 54.40% since 2017, implying roughly $406.7 million of NAV erosion as of March 31. Flynn cites S&P data on seven Octagon CLO tranche defaults and highlights King Street’s larger CLO platform, global reach and broader income-focused strategy. The Board urges votes “FOR” the King Street sub-advisory agreement on the WHITE proxy card via internet, phone or mail.
Positive
- Unanimous Board selection of King Street sub-adviser after competitive process
- King Street assets under management over $30 billion, with 20 U.S. CLOs and 9 European CLOs
- King Street credit team size approximately twice as many credit professionals as Octagon
- Planned strategy expansion to European CLOs, bank loans and European asset-backed securities
Negative
- XFLT NAV per share decline approximately 54.40% since 2017 inception, about $406.7 million NAV erosion as of March 31
- Octagon CLO performance concern S&P reported seven debt tranche defaults across five Octagon CLOs as of June 16, 2026
News Market Reaction – XFLT
In the Jul 21 session, XFLT gained 0.40%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Historical Context
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Jul 09 | Proxy contest filing | Negative | +0.5% | Octagon urged shareholders to reject the Board's proposed sub-adviser change. |
| Jul 01 | Distribution declaration | Positive | +0.8% | XFLT declared its regular monthly distribution of $0.225 per common share. |
| Jun 01 | Distribution declaration | Positive | +0.1% | XFLT declared an unchanged regular monthly distribution of $0.225 per share. |
| May 20 | Technology launch | Positive | -0.2% | XA Investments launched YOGI, a generative AI research tool for interval funds. |
| May 05 | Adviser appointment | Positive | +1.1% | XA Investments agreed to become adviser to the Evanston alternative investment fund. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
XFLT's recent news events were generally followed by modest gains, including the prior proxy filing, while unrelated company news produced mixed reactions.
Key Terms
sub-advisory agreement financial
net asset value financial
CLO financial
debt tranches financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Flynn Details the Terminated Sub-Adviser Octagon’s Underperformance at XFLT and Concerning Recent CLO Defaults Across Its Portfolio (View Videos)
The Board Unanimously Selected the King Street Sub-Adviser for the Strength of Its CLO Platform, Depth of Talent and Expanded Investment Capabilities
More Information About the XFLT Proxy Vote Can Be Found Here
XFLT Asks Shareholders to Vote on the WHITE Proxy Card “FOR” the King Street Sub-Advisory Agreement at Special Meeting on July 30, 2026
CHICAGO, July 21, 2026 (GLOBE NEWSWIRE) -- XA Investments LLC (“XAI”), manager of XAI Floating Rate & Alternative Income Trust (XFLT) (the “Fund”), addressed XFLT shareholders directly in a series of videos to clear up misleading statements made by the terminated sub-adviser Octagon Credit Investors ahead of the Special Meeting of Shareholders on July 30, 2026, during which XFLT shareholders will vote on the Board’s proposal to approve a new investment sub-advisory agreement among the Fund, XA Investments LLC and Rockford Tower Asset Management, L.L.C. (the “King Street Sub-Adviser,” or “Rockford Tower”), a wholly owned subsidiary of King Street Capital Management, L.P. (“King Street”).
XAI President Kimberly Flynn explains why the Fund’s Board acted to remove the terminated sub-adviser on the basis of poor performance:
- “The terminated sub-adviser Octagon was the only portfolio manager responsible for all of XFLT investment decisions since the fund’s inception in 2017.”
- “On Octagon’s watch, the XFLT net asset value (NAV) eroded largely from losses taken from poor investment decisions. XFLT’s net asset value per share declined approximately
54.40% since inception, implying approximately$406.7 million of current-share-equivalent NAV erosion, as of March 31st. That is significant.” - “It was recently reported by S&P Global Ratings on June 16, 2026, that Octagon CLOs defaulted on seven debt tranches across five CLOs.”
- “CLO debt tranche defaults are very uncommon… Only six of the 11,666 CLO tranches rated by S&P defaulted in 2025, and only five defaulted in 2024. Octagon’s seven CLO debt tranche defaults in 2026 exceed the global figure for each of the last two years, respectively.”
Flynn also explains why the Board unanimously selected the King Street Sub-Adviser to replace the terminated Octagon, and enumerates the many benefits to XFLT shareholders if the agreement is approved:
- “King Street’s Rockford Tower division was selected in a competitive process by the board out of a field of other leading alternative credit managers with deep CLO experience.”
- “King Street also has twice as many credit professionals as Octagon. King Street manages over
$30 billion in assets. They also manage 20 U.S. CLOs and 9 European CLOs, so they have experience around the globe.” - “Rockford Tower plans to execute XFLT’s strategy in a more dynamic manner, including additional opportunities and income-focused investments such as European CLOs and bank loans and European asset-backed securities.”
The full videos can be found on XAI’s website.
How to Vote
The Board urges XFLT shareholders to vote “FOR” the King Street Sub-Adviser on the WHITE Card. Use one of the following options to vote:
- By Internet: Visit the website listed on your WHITE proxy card, enter your control number and follow the simple on-screen instructions.
- By Phone: Call the toll-free number listed on your WHITE proxy card.
- By Mail: Sign and return the enclosed WHITE proxy card in the enclosed postage-paid envelope.
If you have any questions or need assistance voting your shared, please contact our proxy solicitation firm, Okapi Partners LLC, toll-free at (855) 305-0855 or by email at XAI@OkapiPartners.com.
About XA Investments
XA Investments LLC is a Chicago-based firm founded by XMS Capital Partners in 2016. XAI serves as the investment adviser for two listed closed-end funds and an interval closed-end fund. In addition to investment advisory services, the firm also provides investment fund structuring and consulting services focused on registered closed-end funds to meet institutional client needs. XAI offers custom product build and consulting services, including product development and market research, marketing and fund management. XAI believes that the investing public can benefit from new vehicles to access a broad range of alternative investment strategies and managers. For more information, please visit www.xainvestments.com.
About King Street Capital Management
King Street is a global alternative investment firm founded in 1995 that manages
Forward-Looking Statements
This press release contains certain statements that may include “forward-looking statements.” Forward-looking statements can be identified by the words “may,” “will,” “intend,” “expect,” “estimate,” “continue,” “plan,” “anticipate,” and similar terms and the negatives of such terms. By their nature, all forward-looking statements involve risks and uncertainties, and actual results could differ materially from those contemplated by the forward-looking statements. Many factors that could materially affect the Fund’s actual results are the performance of the portfolio of securities held by the Fund, the conditions in the U.S. and international financial and other markets, the price at which Fund shares trade in the public markets and other factors. Although the Fund believes that the expectations expressed in such forward-looking statements are reasonable, actual results could differ materially from those expressed or implied in such forward-looking statements. The Fund’s future financial condition and results of operations, as well as any forward-looking statements, are subject to change and are subject to inherent risks and uncertainties. You are cautioned not to place undue reliance on these forward-looking statements, which are made as of the date of this press release. Except for the Fund’s ongoing obligations under the federal securities laws, the Fund does not intend, and the Fund undertakes no obligation, to update any forward-looking statement.
This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer or solicitation or sale would be unlawful prior to registration or qualification under the laws of such state or jurisdiction.
Past performance is no guarantee of future results. An investment in the Fund involves risk, including the possible loss of principal. Investors should consider the Fund’s investment objectives, risks, charges, and expenses carefully before investing. Please refer to the Fund’s filings with the Securities and Exchange Commission for additional information.
Media Contact:
XA Investments LLC
Kim Shepherd
Senior Consultant
kshepherd@xainvestments.com
312-623-5123
www.xainvestments.com
Prosek Partners
Pro-XAI@Prosek.com
