Founder of Third Avenue Management — a legendary practitioner of deep value and distressed investing.
Life story
Martin J. Whitman was born on September 30, 1924, in the Bronx, New York, to a Jewish family. He served in the US Navy in the Pacific during World War II. He graduated from Syracuse University in business administration in 1949 and later earned an MA in economics from The New School.
His wife, Lois Whitman, was an attorney and a Human Rights Watch director; among their three children are Tony Award-winning producer Barbara Whitman and Yale Law School professor James Whitman.
How they got started
Whitman founded M.J. Whitman & Co. in 1974. His first big success was buying mortgage bonds of the bankrupt Penn Central railroad for $100,000 and selling them for five times that. He later established Third Avenue Management and co-managed the Third Avenue Value Fund.
He was an outspoken critic of accounting standards, arguing that financial statements should serve creditors and long-term investors, not just short-term speculators. In 2003 he gave $23m to Syracuse University, whose business school now bears his name.
In March 2012 he retired from managing the roughly $3.2bn Third Avenue Value Fund, handing it to longtime co-manager Ian Lapey. Whitman died on April 16, 2018, aged 93.
Investment style
Whitman championed deep value and distressed investing, focusing on the balance sheet — what a company owns and owes — rather than the income statement. The firm still looks for well-capitalised enterprises whose securities trade at a discount.
In practice this has meant unloved companies, real estate and the debt of distressed businesses.
Best decisions
Penn Central bonds
Investing $100,000 in a bankrupt railroad's bonds and selling them for five times as much remains a textbook example of distressed investing.
Biggest mistakes
The Focused Credit Fund collapse (2015)
After Whitman's era, on December 9, 2015 the firm halted redemptions from its high-yield Focused Credit Fund and moved to liquidate it. The fund, $3.5bn in July 2014, had lost about 27% in 2015, faced about $979m of withdrawals and shrunk to $788m. The episode badly damaged the firm's reputation.
Today
Third Avenue Management operates from New York, with an office in Austin, Texas. It is run by a management committee; Matthew Fine manages the Global Value fund and separate teams run the real estate funds. Its line-up includes the Global Value, Small-Cap Value, Real Estate Value and International Real Estate Value funds.
What to learn from following the portfolio
- New Third Avenue positions are often contrarian bets on unloved companies with strong balance sheets — they need patience.
- Because of its real estate funds, the portfolio may hold many REITs and property companies; these, like banks and insurers, often fail halal screening. Check each position's halal status in the Portfolio tab.
- The Focused Credit Fund is a reminder of liquidity risk — and 13F does not show bonds, only long US equity positions, with a 45-day delay.
An introduction based on public sources — not investment advice. Spotted an error? Let us know.