Third Avenue Management Inc. has launched its first debt fund, which will invest in a concentrated portfolio across the credit spectrum.
The Third Avenue Focused Credit Fund will invest in debt with any credit rating or without a credit rating, and may invest without limitation in distressed securities or other debt that's in default or the issuers of which are in bankruptcy.
It may also hold significant positions in equity or other assets that it receives as part of a reorganization process.
The fund will invest in below-investment-grade credits the manager believes to be undervalued, including junk bonds, bank loans and convertible bonds or preferred stock.
It may also invest in debtor-in-possession financing.
The Third Avenue Focused Credit Fund will be available through major nontransaction fee programs.
The new fund, the New York asset manager's first in eight years, will be managed by Jeffrey Gary, who joined Third Avenue from BlackRock Financial in June. Gary had headed BlackRock Financial's high-yield/distressed investment team, which managed about $17 billion, since 2003.
Third Avenue currently manages about $1 billion in credit and distressed securities through its various equity portfolios and a dedicated hedge fund, which has been available to institutional investors since 2003, he noted.
The new fund's investor class requires a minimum initial investment of $2,500, while its institutional class requires a minimum initial investment of $100,000.