January 30, 2013 at 15:13 PM EST
Fairholme Funds, Inc. and its Series The Fairholme Fund, The Fairholme Focused Income Fund and The Fairholme Allocation Fund Will No Longer Accept New Investors after February 28, 2013

Effective as of the close of business on February 28, 2013, the Funds (NASDAQ:FAIRX) (NASDAQ:FOCIX) (NASDAQ:FAAFX) will suspend the sale of shares to new investors. Shares of each Fund will remain available for purchase only to each Fund’s existing shareholders. The decisions were based on beliefs that (i) inflows from new investors into a Fund may dilute the proportionate interests of existing Fund shareholders in the Fund’s current portfolio holdings and (ii) each Fund is well positioned to fund current operations and make new investments. Each Fund retains the right to make exceptions to the suspension of the sale of its shares to new investors and reserves the right to recommence selling its shares to new investors in the future.

A supplement to the Funds’ prospectus, which has been filed with the SEC, provides additional information about the terms of each Fund’s offering.

Investing in the Funds involves risks including loss of principal. The Funds’ investment objectives, risks, charges, and expenses should be considered carefully before investing. The prospectus contains this and other important information about the Funds, and it may be obtained by calling Shareholder Services at 1-866-202-2263 or visiting our website www.fairholmefunds.com. Read it carefully before investing.

Fairholme Distributors, LLC (1/13)

Contacts:

Fairholme Capital Management, L.L.C.
Brian Ehrlich, 305-358-3000
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