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Pennsylvania Avenue Advisers Plans `Event-Driven'

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Dec. 5, 2002 — Pennsylvania Avenue Advisers LLC, a newly formed investment advisory firm, plans to launch a mutual fund that employs an arbitrage strategy.

The Pennsylvania Avenue Event-Driven Fund will seek growth by engaging in companies undergoing a corporate ‘event,’ according to an SEC filing dated November 22.

Specifically, the filing said the fund will focus on four particular investment strategies:

*Merger arbitrage: publicly announced mergers, takeovers, tender offers, and other corporate reorganizations;

*Capital structure arbitrage: different securities issued by the same issuer whose different securities are mispriced relative to each other;

*Distressed securities investments: companies who are in or near bankruptcy or whose securities are otherwise distressed);

*Proxy fight investment: companies which are subject to a proxy fight over control over the company.

Based in Washington D.C., Pennsylvania Avenue Advisers has no history of advising a fund. Thomas F. Kirchner CFA, founder and president of the adviser, will manage the fund.

Kirchner also works for Fannie Mae (FNM) as a financial engineer, a position he has held since 1999 . From 1996 to 1999 he was a bond trader and financial engineer for Banque Nationale de Paris S.A.

Both Advisor class and Investor class shares on the fund will carry a 1.00% management fee. Total operating expenses, following a fee reduction/expense reimbursement are 1.50% for Advisor class, and 1.75% for the Investor class shares. The fund requires a $1,000 minimum initial investment.