UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14A-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant ☐
Filed by a Party other than the Registrant ☒
Check the appropriate boxes
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☐ |
Definitive Proxy Statement |
| ☒ |
Definitive Additional Materials |
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Soliciting material Pursuant to §240.14a-12 |
XAI Floating Rate & Alternative Income
Trust
(Name of Registrant as Specified In Its Charter)
OCTAGON CREDIT INVESTORS, LLC
GRETCHEN LAM
LAUREN LAW
(Name of Person(s) Filing Proxy Statement, if
other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee paid previously with preliminary materials. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11 |
Octagon Credit Investors,
LLC (“Octagon”), together with the other participants named herein, has filed a definitive proxy statement on Schedule 14A
and accompanying BLUE proxy card with the U.S. Securities and Exchange Commission in connection with the solicitation of
proxies to vote AGAINST the approval of a new sub-advisory agreement at the special meeting of shareholders of the XAI Floating
Rate & Alternative Income Trust (the “Fund”), scheduled to be held on July 30, 2026.
On July 9, 2026, Octagon issued the following press
release and open letter to shareholders of the Fund:
Octagon Urges XFLT Shareholders to Choose a
Better Path Forward and Vote AGAINST the Board’s Proposed Sub-Adviser Change
Files Definitive Proxy Statement
and BLUE Proxy Card in Connection with XFLT’s July 30 Special Meeting
Releases Letter to XFLT Shareholders
Outlining Plan to Lower Fees, Protect Distributions and Narrow the Fund’s Discount to NAV Under Octagon Stewardship
Urges Shareholders to
Vote AGAINST Replacing Octagon with an Unproven Manager at No Savings to Shareholders
New York, NY – July 9, 2026 –
Octagon Credit Investors, LLC (“Octagon”), a leading credit-focused asset manager, today announced that it has filed its definitive
proxy statement with the U.S. Securities and Exchange Commission (the “SEC”) and has issued an open letter to shareholders
of XAI Floating Rate & Alternative Income Trust (formerly, XAI Octagon Floating Rate & Alternative Income Trust) (the “Fund”
or “XFLT”) in connection with the Fund’s upcoming special meeting of shareholders which is scheduled to be held on July 30,
2026 (the “Special Meeting”).
At the Special Meeting, XFLT’s Board of
Trustees (the “Board”) is seeking shareholder approval of a new investment sub-advisory agreement (the “New Sub-Adviser
Proposal”) pursuant to which Rockford Tower Asset Management, L.L.C. (“Rockford Tower”), a newly formed wholly owned
subsidiary of King Street Capital Management, L.P. (“King Street”), would replace Octagon as the Fund’s investment sub-adviser.
In its letter to XFLT shareholders, Octagon outlines
its belief that the installation of Rockford Tower is a grave error that risks the Fund’s performance and favors XAI at shareholders’
expense. Octagon refutes the Board’s tenuous explanation that the change in sub-adviser was a result of performance
concerns, when, in fact, during Octagon’s tenure as XFLT’s sub-adviser (since the Fund’s 2017 inception), the Fund outperformed
its closest peers on both a total shareholder return and NAV basis, earned a five-star Morningstar rating in 2025, and was named a finalist
for Creditflux’s Best Public Closed-End CLO Fund in 2026. Under Octagon’s stewardship, the Fund grew to nearly $580 million
in managed assets, an eight-fold increase since inception.
Rockford Tower has agreed to perform the sub-adviser
role for a lower fee, which Octagon contends will allow XAI to keep more of the overall management fee while shareholders pay the same
total cost.
As an alternative, Octagon has offered to assume
the role of adviser and reduce the Fund’s overall management fee from 1.7% to 1.3%, simplify the management structure under a single
adviser, and focus on closing the trading discount to NAV, including through potential open market share repurchases and/or a tender offer
at or near NAV.
Octagon urges shareholders to vote AGAINST
the New Sub-Adviser Proposal and vote the BLUE proxy card to demand a Better Path Forward under Octagon’s stewardship.
The full text of Octagon’s letter is
below:
July 9, 2026
Dear Fellow XFLT Shareholders,
You have a critical decision to make—one
that may impact the value of your shares.
At an upcoming special meeting of shareholders
scheduled to be held on July 30, 2026 (the “Special Meeting”), the Board of Trustees (the “Board”) of XAI Floating
Rate & Alternative Income Trust (the “Fund” or “XFLT”) is seeking your approval to change the management of
the Fund.
Since XFLT’s inception in 2017, Octagon
Credit Investors, LLC (“Octagon,” “we” or “our”) has served as XFLT’s investment adviser (also
known as the “sub-adviser”) managing the day-to-day investment decisions for your fund and reporting to the Fund’s primary
adviser, XA Investments LLC (“XAI”) (referred to as the “adviser”). Octagon Credit Investors is one of the longest-tenured
CLO managers in the United States, with over 30 years of experience and more than $30 billion in assets under management.
Now, the Board and XAI are seeking to replace
Octagon as the Fund’s sub-adviser, with Rockford Tower Asset Management, L.L.C. (“Rockford Tower”), a newly formed entity
that has never managed a closed-end fund and whose parent company is reportedly facing “lackluster performance, fleeing clients
and an exodus of long-tenured staff.”i
In our view, this would be a grave mistake and
harmful to shareholders, risking the Fund’s performance seemingly to benefit XAI, which stands to earn even more fees
from the Fund. Contrary to the Board’s recommendation, we believe shareholders would be best served by not appointing
a new and inexperienced sub-adviser in Rockford Tower.
Accordingly, we encourage you to vote AGAINST
the proposed appointment of a new sub-adviser (the “New Sub-Adviser Proposal”).
Octagon Has Been an Excellent Steward as
Investment Adviser to XFLT
Under Octagon’s investment stewardship,
XFLT has outperformed its closest peersii on both a total
shareholder return and net asset value (“NAV”) return basis.iii
The Fund’s performance earned XFLT a Five-Star Morningstar Rating in 2025, and the Fund was recognized as a finalist for Creditflux’s
Best Public Closed-End CLO Fund in 2026.
So, why the proposed change?
For one thing, Rockford Tower has agreed to perform
the critical sub-adviser role for a lower fee than we have charged XAI historically, allowing XAI to keep more of the overall management
fees for itself. If the New Sub-Adviser Proposal is approved, an unproven manager would be installed but shareholders would be charged
the same management fee. XAI, however, would stand to make even more money.
XAI and its hand-selected Board members have not
been upfront about this motivation. Instead, they have manufactured a narrative about Octagon’s performance as investment adviser,
but their claims do not withstand basic scrutiny.
The Fund has, in fact, outperformed its
peers over almost every period and on almost every relevant metric, due to Octagon’s investment prowess. Ask yourself: if that
were not the case, why has the Fund grown to nearly $580 million—an eight-fold increase in total managed assets—since inception?
Why has the Fund received accolades from industry experts?
There Is a Better Path Forward
Octagon has regularly recommended initiatives
intended to improve the Fund’s performance and enhance shareholder value. Recently, Octagon even offered to assume the role of adviser
to XFLT and reduce the Fund’s overall management fee from 1.7% to 1.3%. That would immediately improve the Fund’s cash flow
and ability to support the distributions to shareholders.
Unfortunately, XAI and the Board repeatedly disregarded
Octagon’s recommendations and rejected Octagon’s proposal to reduce the Fund’s management fee. Ask yourself:
whose interests were they representing when they turned down a fee cut that would have benefited shareholders?
The best way forward is for shareholders to reject
the New Sub-Adviser Proposal. If that Proposal fails, Octagon is prepared to step in and serve as the adviser to XFLT.
We have developed a plan to support stability
and continuity with respect to the Fund’s distributions, strategy, portfolio and infrastructure:
| 1. | Meaningfully reduce the management fees charged by the Fund; |
| 2. | Simplify the management structure by operating the Fund with just one adviser; and |
| 3. | Focus efforts on reducing the trading price discount to NAV, including by exploring open market share
repurchases and/or a tender offer at or near NAV. |
With these actions and Octagon serving as the
Fund’s adviser, we are confident that XFLT can narrow the discount to NAV while continuing to deliver sustainable distributions—all
to the benefit of the Fund’s shareholders.
But first, shareholders must reject the New Sub-Adviser
Proposal.
Shareholders Should Vote AGAINST the New
Sub-Adviser Proposal
It is time to make your voice heard. And
in our view, you have an easy choice to make: reject the Board’s proposal and send a clear message that shareholders want lower
fees, consistent distributions and efforts to narrow the gap to NAV; or, accept the risk of a new, unproven investment adviser without
any reduction in overall fees or efforts to sustain distributions or reduce the value gap. In our view, there is no reason to support
a proposal that is designed to increase XAI’s fees, when the Board has an option to decrease management fees paid by shareholders
and retain the Fund’s existing sub-adviser that has delivered strong relative performance relative to XFLT’s peer set.
We therefore urge our fellow shareholders to join
us in voting AGAINST the New Sub-Adviser Proposal on the BLUE Octagon proxy card. No matter how many shares
you own, your vote is critical.
If you have already voted for the Proposal,
do not despair—you may change your vote by voting a later-dated proxy AGAINST the Proposal at any time. You may vote AGAINST
on either the enclosed BLUE proxy or any white proxy. Only your latest dated vote counts.
Shareholders who require assistance in voting
their BLUE proxy, or to obtain additional proxy materials are urged to contact Saratoga Proxy Consulting LLC, Octagon’s
proxy solicitor, at:
(212) 257-1311 or (888) 368-0379, or by email
at info@saratogaproxy.com.
Advisors
Sidley Austin LLP is serving as legal counsel
to Octagon. Spotlight Advisors LLC is providing strategic and financial advice to Octagon and Gagnier Communications is providing communications
advice. Saratoga Proxy Consulting is serving as Octagon’s proxy solicitor.
About Octagon Credit Investors
Founded in 1994, Octagon Credit Investors is a
$32 billion asset manager specializing in broadly syndicated loan, structured credit, multi-asset credit, and direct lending strategies.
Octagon’s disciplined, time-tested investment process relies on fundamental credit analysis and active portfolio management to generate
attractive risk-adjusted performance for its clients.
Octagon is majority-owned by Conning,4
a leading global investment management firm with a long history of serving insurance companies and other institutional investors. Octagon
and Conning are part of Generali Investments,5 a platform of asset management firms operating in more than 20 countries,
offering distinctive strategies in public and private markets and expert insights to help investors achieve long-term performance. Generali
Investments is the asset management arm of the Generali Group, one of the world’s largest insurance and asset management players.
For more information, please visit www.octagoncredit.com.
Important Information
Octagon Credit Investors, LLC (“Octagon”),
together with Gretchen Lam and Lauren Law (collectively, the “Participants”), has filed a definitive proxy statement on Schedule
14A, accompanying BLUE proxy card, and other relevant documents with the U.S. Securities and Exchange Commission (the “SEC”)
in connection with the solicitation of proxies to vote AGAINST the approval of a new sub-advisory agreement at the special
meeting of shareholders of the XAI Floating Rate & Alternative Income Trust (the “Fund”) scheduled to be held on July
30, 2026.
THE PARTICIPANTS STRONGLY ADVISE ALL SHAREHOLDERS
OF THE FUND TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER PROXY MATERIALS, INCLUDING THE BLUE PROXY CARD, THAT HAVE BEEN OR WILL BE
FILED BY SUCH PARTICIPANTS BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS ARE OR WILL BE AVAILABLE AT
NO CHARGE ON THE SEC’S WEBSITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS WILL PROVIDE COPIES OF THE DEFINITIVE PROXY
STATEMENT WITHOUT CHARGE UPON REQUEST.
Investor Contacts
John Ferguson / Joseph Mills
Saratoga Proxy Consulting LLC
jferguson@saratogaproxy.com
jmills@saratogaproxy.com
(212) 257-1311
(888) 368-0379
Media Contact
Riyaz Lalani / Dan Gagnier
Gagnier Communications
Octagon@gagnierfc.com
(646) 342-8087
| 1 |
Source: Hema
Parmar, Katherine Burton, Eliza Ronalds-Hannon and Jack Sidders, “King Street’s Poor Returns, Partner Exits Spur Firmwide
Revamp,” Bloomberg, June 26, 2026. |
| 2 |
“Peers” include
Carlyle Credit Income Fund (CCIF), Eagle Point Credit Company (ECC), OFS Credit Company (OCCI), Oxford Lane Capital (OXLC), Pearl
Diver Credit Company (PDCC) and Sound Point Meridian Capital (SPMC). |
| 3 |
Source: Bloomberg and fund
filings. Data as of May 19, 2026, the last trading day prior to XFLT’s public disclosure of the proposed sub-adviser transition.
Peer data refers to median. |
| 4 |
Conning, Inc., Goodwin
Capital Advisers, Inc., Conning Investment Products, Inc., a FINRA-registered broker-dealer, Conning Asset Management Limited, Conning
Asia Pacific Limited, Octagon Credit Investors, LLC, Global Evolution Holding ApS and its subsidiaries, and Pearlmark Real Estate,
L.L.C. and its subsidiaries are all direct or indirect subsidiaries of Conning Holdings Limited (collectively, “Conning”)
which is one of the family of companies whose controlling shareholder is Generali Investments Holding S.p.A. (“GIH”)
a company headquartered in Italy. Assicurazioni Generali S.p.A. is the ultimate controlling parent of all GIH subsidiaries. |
| 5 |
Generali Investments Holding
S.p.A., data as at end of Q4 2025 net of double counting. Generali Investments is part of the Generali Group, which was established
in 1831 in Trieste as Assicurazioni Austro-Italiche. Generali Asset Management S.p.A. Società di gestione del risparmio, Generali
Real Estate S.p.A. Società di gestione del risparmio, Infranity SAS, Sosteneo S.p.A. Società di gestione del risparmio,
Sycomore Asset Management, Aperture Investors LLC (including Aperture Investors UK Ltd), Lumyna Investments Limited, Plenisfer Investments
S.p.A. Società di gestione del risparmio, Conning, Inc., Conning Asset Management Limited, Conning Asia Pacific Limited, Conning
Investment Products, Inc., Goodwin Capital Advisers, Inc. (collectively, “Conning”) and its subsidiaries (Global Evolution
Asset Management A/S - including Global Evolution USA, LLC and Global Evolution Fund Management Singapore Pte. Ltd- Octagon Credit
Investors, LLC, Pearlmark Real Estate, LLC and PREP Investment Advisers LLC) are part of Generali Investments, as well as Generali
Investments CEE. Please note that the countries refers to the countries where the different funds of the asset management companies
that are part of Generali Investments are registered for distribution. Please note that not all funds are registered in all the countries
and not all the asset management companies are licensed to operate in such countries. Generali Investments Holding S.p.A. is the
holding company holding, directly or indirectly, a majority of the shares in the asset management companies listed above. |
