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July 1, 2004 — Salomon Brothers Asset Management Inc. said Robert M. Donahue Jr., the portfolio manager of Salomon Brothers Srs Fds:Capital/A (SCCAX), is leaving the company to start a hedge fund.

Salomon Brothers money manager Kevin Caliendo will replace Donahue on the $1.7-billion fund, effective July 15. Caliendo is a co-manager of the closed-end Salomon Bros Fund (SBF) and also helps manage institutional Salomon Brothers funds, including a health care fund.

The investment style of the Capital Fund will not change under Caliendo, a spokeswoman for Salomon Brothers said. Caliendo, like Donahue, will invest in growing companies as well as undervalued stocks, the spokeswoman, Mary Athridge, said.

Donahue, who joined the fund in 1998, has been its sole manager since May, when Ross Margolies, who had run the fund since 1995, stepped down to concentrate on overseeing hedge funds for a unit of Citigroup Inc (C), which is also the parent of Salomon Brothers.

The Capital fund returned 4.3% this year through June, versus 3.5% for its large-cap value fund peers. The portfolio is ranked 3 Stars by Standard & Poor’s.

Contact Robert F. Keane with questions or comments at:

bkeane@ia-mag.com.