Third Avenue Management LLC has parted ways with Chief Executive Officer David Barse after the collapse of the company’s Focused Credit bond fund last week. The collapse of Third Avenue’s Focused Credit Fund jolted Wall Street and renewed worries about the difficulty of trading securities on the U.S. bond market. New York-based Third Avenue is a relatively small investment manager with fund assets that totaled $10 billion at the beginning of the year.
Third Avenue’s Focused Credit Fund was overwhelmed with heavy losses and surging investor net withdrawals, forcing its CEO David Barse to abruptly liquidate the fund and block redemptions.
The redemptions and losses over the past year cut the size of the Third Avenue Focused Credit Fund to $789 million from nearly $3 billion. Run by Tom Lapointe, the fund bet on distressed situations, such as the bankruptcy-related claims of Lehman Brothers.
The blow-up of the Focused Credit Fund was the biggest mutual fund failure since the financial crisis.