Bruce Berkowitz has promoted his chief research officer Fred Fraenkel to the role of president. He will continue to serve in his current CRO role, where he oversees all of Fairholme 's research activities.

Berkowitz himself held the position since the departure of long-time friend Charlie Fernandez from the job last Spring.

Fraenkel joined Fairholme in 2011.

Before that, he was the vice chairman of the Beacon Trust Company where he ran the investment process and published investment strategy. He was a member of Barron's year-end roundtable from 1982 to 1985 and headed global research at Lehman Brothers in the 1990's, among other things.

The promotion comes as the formerly-embattled equity shop enjoys a resurgence of sorts. A national pub recently declared that firm was experiencing a comeback, while another declared the firm one of the biggest winners of the year. Fairholme even surprised Morningstar.

Here�s the press release.

Company Press Release
Fairholme Announces Appointment of Fred Fraenkel as President

MIAMI -- Fairholme announced today that Fred Fraenkel will now serve as President of the Firm. Mr. Fraenkel will continue to serve in his current role as Chief Research Officer of Fairholme Capital Management, where he oversees all of the Firm's research activities.

"Fred's role as President is an exciting development for Fairholme," said Bruce Berkowitz, Chief Investment Officer and Managing Member of Fairholme. "Fred's extensive experience in the mutual fund and hedge fund space has proved invaluable to the Firm. This is just a formal announcement of what has already been the reality, and it allows me to focus on what I do best - investing."

"I am excited to help lead Fairholme as we continue to ignore the crowd by seeking out undervalued opportunities," said Fraenkel.

Prior to joining Fairholme in 2011, he was the Vice Chairman of Beacon Trust Company where he ran the investment process and published investment strategy. Mr. Fraenkel has over 30 years of investing experience including membership in Barron's year-end roundtable from 1982-1985 and heading global research at Lehman Brothers in the 1990's. He was formerly the Chairman of Millennium 3 Capital, a venture firm specializing in early stage companies. Before founding Millennium 3 Capital in 2000, Mr. Fraenkel served as Vice Chairman of ING Barings Furman Selz and Chief Operating Officer of Furman Selz.

Mr. Fraenkel also spent seven years at Lehman Brothers, Inc., where he was a Managing Director and Director of Global Research overseeing 110 analysts located in New York, London, Tokyo and Hong Kong. As Global Research Director, he participated in managing the department's ascension in the Institutional Investor poll from a rank of 15th in 1987 to 1st in 1990, 1991, and 1992.

Before Lehman Brothers, Mr. Fraenkel was Chairman and Chief Executive Officer of Market America Group, an investment advisory firm. He also spent four and a half years as Director of Equity Research and a member of the Board of Directors at Prudential Securities. Mr. Fraenkel began his Wall Street career in 1974 as a securities analyst with Goldman Sachs & Company and was Chief Investment Strategist for E.F. Hutton.

Mr. Fraenkel received a B.S. in Economics and Finance from Lehigh University and an M.B.A. from the Wharton School, University of Pennsylvania. He was elected to membership of Beta Gamma Sigma and Omicron Delta Epsilon, the national business school and economics honorary societies. He is past Chairman of the Board of Advisors of the College of Business and Economics of Lehigh University. Mr. Fraenkel is a member of the New York Society of Security Analysts and the CFA Institute. Fairholme Capital Management, L.L.C. is registered with the United States Securities and Exchange Commission as an investment adviser. Fairholme Capital Management is the investment manager to The Fairholme Fund (NAS: FAIRX) , The Fairholme Focused Income Fund (NAS: FOCIX) , and The Fairholme Allocation Fund (NAS:FAAFX) .

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 websitewww.fairholmefunds.com . Read it carefully before investing. The Fairholme Fund is non-diversified, which means that The Fairholme Fund invests in a smaller number of securities when compared to more diversified funds. Therefore, The Fairholme Fund is exposed to greater individual stock volatility than a diversified fund. The Fairholme Fund also invests in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. The Fairholme Fund may also invest in "special situations" to achieve its objectives. These strategies may involve greater risks than other fund strategies.

The Fairholme Focused Income Fund (the "Income Fund") is a non-diversified mutual fund, which means that the Income Fund invests in a smaller number of securities when compared to more diversified funds.This strategy exposes the Income Fund and its shareholders to greater risk of loss from adverse developments affecting portfolio companies. The Income Fund's investments are also subject to interest rate risk, which is the risk that the value of a security will decline because of a change in general interest rates. Investments subject to interest rate risk will usually decrease in value when interest rates rise and rise in value when interest rates decline. Also, securities with long maturities typically experience a more pronounced change in value when interest rates change. Debt securities are subject to credit risk (potential default by the issuer). The Income Fund may invest without limit in lower-rated securities. Compared to higher-rated fixed income securities, lower-rated debt may entail greater risk of default and market volatility.

The Fairholme Allocation Fund (the "Allocation Fund") is a non-diversified mutual fund, which means that the Allocation Fund can invest in a smaller number of securities when compared to more diversified funds. The Allocation Fund may invest in lower-rated securities, which may have greater market risk. This strategy exposes The Allocation Fund and its shareholders to greater risk of loss from adverse developments affecting portfolio companies. The allocation of investments among the different asset classes, such as equity or fixed-income asset classes, may have a more significant effect on The Allocation Fund's net asset value when one of these classes is performing more poorly than others.

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