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Manager to Leave Salomon Brothers Capital Fund

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Feb. 27, 2004 — Ross Margolies will step down as manager of the $1.7 billion Salomon Brothers Srs Fds:Capital/A (SCCAX) in May.

Margolies is leaving the fund to concentrate on overseeing hedge funds he has been piloting for a unit of Citigroup Inc (C), according to Robert Donahue Jr., who helps run Salomon Brothers Capital and will continue as its sole manager following Margolies’ departure. Salomon Brothers Asset Management, the mutual fund’s investment adviser, is also part of Citigroup.

The fund manager change was disclosed in a regulatory filing. Margolies, who began running the fund in 1995, could not be reached for comment.

Donahue, who joined Margolies on the fund in 1998, said there will be “very little change” in the way the fund is run, because both managers have “a very similar approach to investing.”

Donahue said Salomon Brothers Capital invests in undervalued and growth stocks, and buys companies of any size, although it focuses on those with market caps of $1 billion or more.

Salomon Brothers Capital returned 43.8% last year, while the average large-cap value fund was up 28.7%. Last month, the Salomon Brothers fund gained 4.6%, compared with a 1.7% return by its peers. Salomon Brothers Capital returned an average annualized 10.7% for the five years ended last month, while similar funds rose 3.2%.