Filed Pursuant
to Rule 497(e)
File Nos.
2-28049
811-01586
THE KAUFMANN FUND, INC.
140 East 45th Street, 43rd Floor
New York, New York 10017
Tel: (212) 922-0123
Fax: (212) 661-2266
Supplement dated March 23, 1998
to Prospectus dated May 1, 1997
In response to reports in the press over the last several days
speculating on the future ownership of Edgemont Asset Management Corporation
("Edgemont"), the Fund's investment advisor, today Lawrence Auriana and Hans
P. Utsch, co-founders of Edgemont and portfolio co-managers of the Fund,
denied in a press release news reports that they were planning to retire.
Mr. Auriana stated in the press release: "We are as committed as ever
to the long-term success of the Fund, and have absolutely no intentions of
retiring in the foreseeable future. We can confirm the reports that we have
been in discussions to sell or merge our management company. Any such
transaction, however, would only take place with a firm which would preserve
our unique investment style and culture and be able to contribute additional
resources to better serve Kaufmann shareholders. Hans and I plan to manage
the Kaufmann Fund for at least the next five years."
In a supplemental letter sent to shareholders of the Fund, dated March
23, 1998, Messrs. Auriana and Utsch stated further: "Over the past few years
we have been approached by a number of parties expressing interest in
acquiring strategic ownership of Edgemont. We recently began to engage in
discussions with a small number of these parties. The decision to explore
such a transaction was not prompted by thoughts of either of us retiring. In
fact, the opposite is true. We both plan to remain with Edgemont and manage
the continued growth of the Kaufmann Fund for at least the next five years.
We currently anticipate that such discussions will continue, although
there can be no assurance that a transaction will take place. Any such
transaction would take place only with a firm expected to preserve our
management style and keep our investment staff and other key personnel in
place. In other words, any such firm would not want to disturb the Fund's
success; it would want to see the Fund grow. In fact, our discussions are
limited to firms who would enhance our marketing and support activities and
allow us to remain focused on investing while delivering improved services to
shareholders."
Any such transaction would be subject to the approval of both the
disinterested directors and the shareholders of the Fund of a new investment
advisory agreement to be in effect following such transaction, and in
connection with any such approval, the disinterested directors and
shareholders would be provided with detailed information regarding the
transaction.
