XAI Floating Rate & Alternative Income Trust Names Interim Sub‑Adviser

What Happened

• XAI Floating Rate & Alternative Income Trust (NYSE: XFLT) filed an 8‑K on July 30, 2026 stating it entered an Interim Investment Sub‑Advisory Agreement with XA Investments, LLC (the Adviser) and Rockford Tower Asset Management, L.L.C. (the King Street Sub‑Adviser), effective July 30, 2026. This followed termination of the prior sub‑advisory agreement with Octagon Credit Investors, LLC effective the same date.
• The Trust adjourned a special shareholder meeting to approve a new permanent sub‑advisory agreement; the meeting was continued to August 6, 2026 to solicit additional proxies. The Interim Sub‑Advisory Agreement will end upon shareholder approval of the new agreement or on the 150th day after effectiveness, whichever comes first.
• Rockford Tower is a newly formed, wholly owned registered investment adviser subsidiary of King Street Capital Management, L.P. King Street reported $30.0 billion in assets under management as of December 31, 2025 and manages approximately $12 billion in CLO assets across U.S. and European CLOs.
• Portfolio management will be led by Young Choi (lead portfolio manager) with Terry Ing as portfolio manager, both senior King Street professionals with prior experience at Citadel, KKR and PIMCO.

Key Details

• Interim agreement date: July 30, 2026; special meeting adjourned to August 6, 2026.
• Trust advisory fee to the Adviser remains 1.70% annually of average daily Managed Assets (paid monthly in arrears).
• King Street Sub‑Adviser will receive 52% of the advisory fee payable by the Trust to the Adviser (before any fee waivers or reimbursements).
• Reimbursable sub‑adviser expenses are capped at 0.07% per year of the Trust’s average daily net assets; expense reimbursements are subject to Board approval and certain limits.

Why It Matters

• The Trust’s overall advisory fee rate and investment objective/policies remain unchanged, so shareholders’ headline fee rate is unaffected; however, the allocation of that fee changes with the new sub‑adviser receiving 52% of the Adviser’s fee.
• The agreement is interim and temporary pending shareholder approval of a new permanent sub‑advisory agreement; investors should note the adjourned vote date (Aug 6, 2026) and the 150‑day maximum duration of the interim arrangement.
• New portfolio managers from King Street (Choi and Ing) could influence trading, portfolio construction and risk management approaches; reimbursable expenses for their tools and diligence are permitted but capped, which limits additional cost exposure to shareholders.