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Wednesday, April 18, 2018

A Value Fund Entrepreneur Dies at 93

News summary by MFWire's editors

A Gotham mutual fund entrepreneur and star deep value PM passed away earlier this week.

On Monday night Marty Whitman, founder of Third Avenue Management [profile], died at the age of 93, the New York City-based firm's management committee confirmed yesterday. Barron's, Bloomberg, the Central New York Business Journal, Institutional Investor, Morningstar, and Reuters all covered the news of Whitman's death.

Martin J. Whitman was born in New York City on September 30, 1924. The son of Polish immigrants, he grew up in the Bronx. After serving in the U.S. Navy in World War II, he attended Syracuse University thanks to the G.I. bill, earning a business degree, and later an economics masters from the New School. He started out as an analyst at Shearson Hammill in 1950, worked at the family office of William Rosenwald, and eventually founded his own broker-dealer, M.J. Whitman & Co., in 1974. Ten years later, he helped take over Equity Strategies, the predecessor to the Third Avenue Funds.

Thanks to a 2003 donation from Whitman and his wife, Lois, Syracuse University built a 160,000-square foot building for what is now its Martin J. Whitman School of Management, and Whitman has served as an honorary trustee to the university since 2008. He also taught at Syracuse, as well as at the Yale School of Management and Columbia University Business School. Syracuse's school paper reports that Whitman remained active at the school until the end, coming to campus for a celebration just two weeks ago.

Whitman's specialty was deep value and distress investing, an approach rooted in fundamental, bottom-up research to find undervalued companies with strong long-term prospects. Third Avenue Management's roots go back to 1986, and in 1990 Whitman launched his flagship Third Avenue Value Fund, for which he won M*'s 1990 manager of the year award. Affiliated Managers Group (AMG), a publicly traded acquirer of asset managers, bought a 60-percent stake in Third Avenue in 2002 and remains a key Third Avenue ally to this day.

Though still a PM, Whitman stepped down as Third Avenue's co-chief investment officer in 2010. Since late 2015, Whitman's firm has been led by a management committee, which since late 2017 has included: Matt Fine, value PM; Ryan Dobratz, lead PM for real estate; and Jason Wolf, lead PM for real estate.

In a statement, the committee remembers Whitman as "an extraordinary investor, an impactful teacher, and a true capital markets pioneer."

"He was one of the sharpest-minded investors in recent times," the committee states. "The principles that he developed over the course of decades are more relevant today than ever."

M* remembers Whitman as "a vulture of a value investor, ... a value investor after Benjamin Graham's own heart," whose mutual fund shareholders won't forget "his insightful and witty letters to shareholders." Yet Whitman focused not on price to book ratio, but on takeover value, M* notes. The pub reminds fundsters and investors alike of Whitman's preferred investing criteria (in addition to a very cheap share price, of course). For examples of how Whitman put that those criteria to work, readers can turn to Bloomberg, which recalls some of Whitman's big deep value bets over the years.

"Marty Whitman represented the very best of a generation that believed in hard work, education and striving for excellence always," Kent Syverud, chancellor of Syracuse University, tells the Business Journal. "He used his education and his extraordinary intellect to achieve the highest levels of success, and yet he never forgot his humble roots."

Whitman is survived by his wife, three children and six grandchildren, the University's paper reports.

Editor's Note: A prior version of this story included an out-of-date list for Third Avenue's management committee. The committee currently includes: Ryan Dobratz, Matt Fine, and Jason Wolf. 

Edited by: Neil Anderson, Managing Editor

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