The board justified the proposed switch by citing underperformance against the Morningstar LSTA US Leveraged Loan 100 Index. Egan-Jones rejected this assessment, arguing the benchmark ignores the fund’s specific strategy involving CLO debt and equity. When measured against a composite index reflecting the fund's actual allocations, the firm found the current performance picture to be significantly healthier.

Beyond performance, the report flags governance friction. Although management fees remain constant, the adviser’s cut increases under the new deal. Egan-Jones also questioned the selection process, noting that management provided little clarity on whether other candidates were vetted. The firm remains unmoved by the board’s recent promise of a tender offer, characterizing the linkage between that liquidity opportunity and the sub-adviser vote as a tactic shareholders should view with skepticism. Given the lack of evidence that the transition would enhance long-term value, the firm maintains that the status quo is the safer path for investors.