Barse Turned to a PE Savior; Third Avenue Said No
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Thursday, December 24, 2015

Barse Turned to a PE Savior; Third Avenue Said No

A giant private equity firm almost swooped into the Third Avenue Focused Credit Fund [profile] collapse, but the deal never went through.

David Barse
Third Avenue Management
Then Chief Executive Officer
Matt Wirz and Gregory Zuckerkman of the Wall Street Journal provide a detailed account of the rise and fall of Third Avenue CEO David Barse. The piece reveals that, in his final day at the company, Barse pitched the Third Avenue team a plan to sell assets from the falling fund to Fortress Investment Group. The team (the article doesn't specify who) said no, and upon the persistence of Barse, they showed him the door.

Meanwhile, Reuters' Svea Herbst-Bayliss, Ross Kerber, and Tim McLaughlin offer their own deep dive into Third Avenue, focusing more on the fallen fund itself. Among other tidbits, the wire service says that, per unnamed Third Avenue employees (past and present), three of the eight people working on the Focused Credit Fund left in the first half of this year.

Martin J. Whitman
Third Avenue Management
Chairman, Portfolio Manager
Thanks to anonymous sources, the detailed WSj piece includes lots of insight into the drama at Third Avenue in its rough seven years since the financial crisis. In particular, the WSJ paints a picture of the tensions between Barse and famous Third Avenue founder Marty Whitman, who now serves as chairman of the firm after handing the CEO reins to Barse in 2002 and then retiring from PMing the flagship Third Avenue Value Fund in 2012.

The story also offers a perspective on how the rise of the Focused Credit Fund fit into what was going on at Third Avenue since 2009.

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