THE ADVISORS FUND L.P. ("Advisors Fund")
Supplement to Prospectus dated March 1, 1994
On July 27, 1994, Advisors Fund's Individual General Partners approved an
Agreement and Plan of Sale and Liquidation (the "Agreement") pursuant to which
the assets of Advisors Fund will be acquired by Smith Barney Shearson
Fundamental Value Fund Inc. ("Value Fund") through an exchange of shares of
Value Fund and the assumption by Value Fund of substantially all of Advisors
Fund's identified liabilities. Value Fund shares would then be distributed to
shareholders of Advisors Fund in liquidation of Advisors Fund. Although
Advisors Fund and Value Fund have slightly different investment objectives, it
is believed that the simpler investment approach followed by Value Fund can
produce comparable or even superior returns under many conditions, and can do
so with a lower cost to shareholders.
Under the terms of the Agreement, each shareholder of Advisors Fund would
become a shareholder of Value Fund, receiving shares of Value Fund with a
value equal to the value of the shareholder's investment in Advisors Fund as
of the date of the closing of the proposed transaction. The transfer of
assets from Advisors Fund to Value Fund in exchange for shares of Value Fund
will be a taxable event, and Advisors Fund will recognize taxable income or
loss as if the assets had been sold. Since Advisors Fund expects to be
treated as a partnership for Federal income tax purposes, it will not be
subject to tax as a result of the transfer; instead, shareholders of Advisors
Fund will report and pay tax on Advisors Fund's taxable income. Any net
income allocated to a shareholder will increase the shareholder's tax basis in
his or her shares, while net losses allocated to a shareholder will reduce
such tax basis.
Consideration of the transaction contemplated by the Agreement is subject to
the fulfillment of certain conditions, including the approval of shareholders
of Advisors Fund and Value Fund. Proxy materials describing the proposed
transaction will be mailed to Advisors Fund shareholders in anticipation of a
meeting of shareholders expected to be held in November 1994. If approved by
shareholders at that time, the transaction will occur as soon after the
meeting as practicable.
In anticipation of the proposed transaction, purchases of shares of Advisors
Fund will not be accepted after August 19, 1994.
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Supplement dated July 28, 1994.
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