Legendary investor Marty Whitman, 90, is holding court in his office, wearing a blue sweatshirt and khakis, with his feet up on the coffee table. When the discussion turns to a topic he likes—how his form of value investing differs from the classic style of Benjamin Graham and David Dodd, say—his eyes flash and his whole face lights up. But he’s known as a curmudgeon for a reason, and when the subject is something he’d rather not discuss, he practically growls.
There has been a lot to growl about lately. Third Avenue Management (Trades, Portfolio), the mutual-fund firm Whitman founded in 1986, has struggled with management turnover and poor performance. Assets have shrunk to $10.2 billion from a peak of $26 billion in 2006. The firm’s flagship fund, Third Avenue Value (TVFVX), which Whitman ran from its 1990 inception through 2012, now rates a meager two stars from Morningstar. It has just $2 billion in assets, and is on its second manager since his departure. Third Avenue International Value (TVIVX), which was already shrinking when longtime manager Amit Wadhwaney departed last year, lost more than 60% of its assets thereafter; it now has $269 million. Continue Reading »