Placing of Shares

ACORN INCOME FUND LIMITED
30 September 1999

Placing by Collins Stewart Limited 
of up to 15 million New Ordinary Shares

Introduction

Acorn Income Fund Limited ('the Company') is to raise up to £19,387,150 (after
expenses) through the issue of up to 15 million new ordinary shares of 25p
each ('New Ordinary Shares') by way of a Placing at 132.5p per share ('the
Issue') and is raising additional borrowings under a new facility from the
Bank of Scotland Offshore ('New Bank of Scotland Offshore Facility').  The
Issue is conditional on the admission of the New Ordinary Shares to the
Official List of the London Stock Exchange becoming effective.

Background to and reasons for the Issue

The Company's Ordinary Shares commenced trading on the London Stock Exchange
on 11 February 1999 since when both the share price and the net asset value
have performed strongly.  Since launch the net asset value per Ordinary Share
has increased from 96p (as stated in the prospectus dated 5 February 1999) to
127.4p on 23 September 1999 an increase of 32.7%.  Similarly, the share price
has increased from its mid market price at the close of business on 11
February 1999 of 101.5p to 130.5p on 29 September 1999 an increase of  28.6%. 
The Board believes that the demand for the Company's Ordinary Shares is not
being fully satisfied by supply in the secondary market.  The Directors
therefore believe that it is an appropriate time to increase the size of the
Company for the benefit of Shareholders by the issue of the New Ordinary
Shares and by the raising of further debt by means of the New Bank of Scotland
Offshore Facility.

The Board believes that the Placing and the drawdown of the New Bank of
Scotland Offshore Facility will have the following advantages for
Shareholders:

X       the Company should be able to increase the dividends payable on the
        Company's Ordinary Shares.  In the absence of unforeseen circumstances
        it is estimated that the Directors should be in a position to declare
        dividends in respect of the financial year ending 31 December 2000
        amounting in total to 11p* per Ordinary Share compared to the
        estimated aggregate dividends payable in respect of the period to 31
        December 1999 of 8.5p* per Ordinary Share;

X       the Company will benefit from a reduced cost of borrowing.  The
        Company has agreed with Bank of Scotland Offshore that the interest
        rate margin on the New Bank of Scotland Offshore Facility will be 100
        basis points over LIBOR plus mla costs compared to the interest rate
        margin on the existing facility from Bank of Scotland Offshore of 150
        basis points over LIBOR plus mla costs;

X       an increase in the number of Ordinary Shares in issue should broaden
        the Shareholder base and improve liquidity in the Ordinary Shares; and

X       an increase in the size of the Company will result in the Company's
        fixed administration costs being spread over a greater number of
        Ordinary Shares.


* These are dividend estimates only and are not intended to be, nor should be
taken as, forecasts of profits.

Dividend Policy

In the Company's prospectus dated 5 February 1999, the Board stated that, in
the absence of unforeseen circumstances or changes in tax rates, the Company
expected to declare total dividends in respect of the period ending 31
December 1999 of not less than 8.5p* per Ordinary Share which would have given
a dividend yield of 8.5 per cent per Ordinary Share at the placing price at
launch of 100p.

The Board remains satisfied that, in the absence of unforeseen circumstances
or changes in tax rates, the Company should be able to pay aggregate dividends
of not less that 8.5p* per Ordinary Share for the period ending 31 December
1999.

The Company paid a first interim dividend of 2p on 2 July 1999 and a second
interim dividend of 2.75p on 27 September 1999 and, subject to unforeseen
circumstances, expects to declare a third interim dividend of 1.25p* and a
fourth interim dividend of not less than 2.5p* in respect of the period to 31
December 1999.

The New Ordinary Shares will rank pari passu with the existing Ordinary Shares
save that they will not rank for the third interim dividend for the quarter
ended 30 September 1999 to be paid in December 1999, but thereafter, they will
rank pari passu in all respects with the existing Ordinary Shares including in
relation to the fourth interim dividend for the quarter ending 31 December
1999 to be declared and paid in February 2000 and for all subsequent
dividends.

As stated above, in the absence of unforeseen circumstances the Board expects
that the Company should be able to declare total dividends in respect of the
year ending 31 December 2000 of not less than 11p*.

New Bank of Scotland Offshore Facility

Bank of Scotland Offshore has agreed to make available a committed sterling
floating rate term loan in a maximum amount of £26 million for approximately 6
years, assuming that the Placing is subscribed in full.  The New Bank of
Scotland Offshore Facility will replace the existing facility from Bank of
Scotland Offshore.  Taking into account the proceeds from the issue of New
Ordinary Shares and the growth in the Company's assets since launch, the
arrangement of the New Bank of Scotland Offshore Facility will return the
Company's gearing to approximately the same level as it was when the Ordinary
Shares commenced trading. 

Interest on the New Bank of Scotland Offshore Facility will be payable at the
rate of 100 basis points over LIBOR plus mla costs.  As at 27 September 1999
the interest rate on the New Bank of Scotland Offshore Facility would have
been 6.625 per cent. per annum.  Interest will be payable by the Company
quarterly.

Part of the New Bank of Scotland Offshore Facility will be applied in full
repayment of the existing facility from Bank of Scotland Offshore.

The New Bank of Scotland Offshore Facility will be secured by a first charge
over the cash and investments of the Company. 

Placing Arrangements

Collins Stewart Limited has agreed to use its reasonable endeavours to procure
subscribers for up to 15 million New Ordinary Shares at 132.5p per share
pursuant to the Placing.  The Placing is not being underwritten.  The Placing
is conditional upon admission of the New Ordinary Shares to the Official List
of the London Stock Exchange becoming effective.  Dealings in the New Ordinary
Shares are expected to commence on 13 October 1999.

* These are expected dividends only and are not intended to be, nor should
they be taken as, forecasts of profits.

Enquiries:
       
Martin Bralsford
Acorn Income Fund Limited
       Tel: [phone]

Shane Le Prevost/Andrew Duquemin
Collins Stewart Fund Management Limited
       Tel: [phone]

Rolly Crawford/Paul Richards 
Collins Stewart Limited       Tel: [phone]