SCHEDULE 14A INFORMATION
                    Proxy Statement Pursuant to Section 14(a)
                     of the Securities Exchange Act of 1934
                                (Amendment No. )

Filed by the Registrant                        X
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Filed by a Party other than the Registrant
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Check the appropriate box:


___  Preliminary Proxy Statement

___  Confidential, for Use of the Commission Only (as permitted by
     Rule 14a-6(e)(2)

___  Definitive Proxy Statement

___  Definitive Additional Materials

x    Soliciting Material Pursuant to section.240.14a-12
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                             THE KAUFMANN FUND, INC.
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                (Name of Registrant as Specified in its Charter)



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    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

X     No fee required.
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___   Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11

         1) Title of each class of securities to which transaction applies:

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         2) Aggregate number of securities to which transaction applies:

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         3) Per unit price or other underlying value of transaction computed
            pursuant to Exchange Act Rule 0-11 (set forth the amount on which
            the filing fee is calculated and state how it was determined):

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         4) Proposed maximum aggregate value of transaction:

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         5) Total fee paid:

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___      Fee paid previously with preliminary materials.

___      Check box if any part of the fee is offset as provided by Exchange  Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

         1)       Amount Previously Paid:_______________________________________

         2)       Form, Schedule or Registration Statement No.:_________________

         3)       Filing Party:_________________________________________________

         4)       Date Filed:___________________________________________________



                                                                October 20, 2000


Dear Kaufmann Shareholder:

         For several years, we have been looking for the right corporate
partner, one that could expertly handle the increasingly complex tasks of fund
administration and marketing, ALLOWING US TO CONCENTRATE FULLY ON PORTFOLIO
MANAGEMENT, which is what really counts in providing Kaufmann shareholders with
the best possible investment returns.

         We are extremely pleased to announce that we have finally found that
partner in Federated Investors, Inc., a public company that is listed on the New
York Stock Exchange, symbol FII. Federated has agreed to purchase the business
of Edgemont Asset Management Corp., which is the Investment Advisor of the
Kaufmann Fund.

         As you know, meeting with and evaluating company managements is what we
do virtually every day in the course of managing Kaufmann's portfolio. WE
BELIEVE FEDERATED INVESTORS TO BE ONE OF THE BEST MANAGED MUTUAL FUND COMPANIES
IN AMERICA. In business since 1955 and based in Pittsburgh, Federated has
steadily if quietly grown into one of the largest mutual fund companies in the
country, with approximately $130 billion under management, spread over some 130
different funds of almost every type.

         The combination with Federated promises distinct and important benefits
for all shareholders of the Kaufmann Fund:

         ~ WE (HANS AND LARRY) WILL CONTINUE TO MANAGE THE FUND UNDER LONG-TERM
EMPLOYMENT CONTRACTS THAT GIVE US GREAT INCENTIVES TO ACHIEVE SUPERIOR
PERFORMANCE FOR KAUFMANN SHAREHOLDERS OVER THE NEXT 6 YEARS.

         ~ Although the Federated funds are load funds, persons who are Kaufmann
shareholders when the transaction closes (sometime in the first quarter of 2001)
will continue to be able to purchase shares in the Kaufmann Fund without having
to pay a sales charge.

         ~ Federated also intends to take steps TO GIVE KAUFMANN SHAREHOLDERS
THE OPPORTUNITY TO INVEST WITHOUT SALES CHARGES IN A WIDE VARIETY OF OTHER
FEDERATED FUNDS.

         ~ Federated can be expected to provide shareholders with an enhanced
level of customer service.

         The transaction is subject to the approval of both the Board of
Directors and the shareholders of the Kaufmann Fund. In the near future, you
should receive a Proxy statement giving further details and asking for your
approval. We hope you will read it carefully.


         In the meantime, please call 1-800-261-0555 with any questions, and
take a look at the corporate web site of Federated Investors
(www.federatedinvestors.com) for more information about this world-class
company.

         As always, we thank you for your faith and confidence, and look forward
to serving you for many years to come.

Sincerely,



Hans P. Utsch                       Lawrence Auriana
Portfolio Co-Manager                Portfolio Co-Manager
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Federated Equity Funds will be filing a proxy statement with the Securities and
Exchange Commission (SEC) as soon as practicable. The proxy statement will be
sent to shareholders of The Kaufmann Fund seeking their approval of the proposed
combination. Shareholders of The Kaufmann Fund are urged to read the proxy
statement to be filed with the SEC because it will contain important
information. When filed, the proxy statement and other information filed by
Federated Equity Funds can be obtained free of charge at the Internet World Wide
Web site maintained by the SEC at (http://www.sec.gov) The Kaufmann Fund,
Edgemont Asset Management Corporation and their respective officers and
directors may be soliciting proxies from The Kaufmann Fund's shareholders in
favor of the combination. Information concerning The Kaufmann Fund officers and
directors participating in the solicitation is set forth in Post-Effective
Amendment No. 51 to The Kaufmann Fund's Registration Statement on Form N-1A,
filed with the SEC on April 28, 2000.