This post has been excerpted from a letter by Matthew Fine, Lead Portfolio Manager of the Third Avenue International Value Fund.
During the [second] quarter we disposed of our position in BinckBank, which we had owned for approximately three years.
Through a series of written and verbal correspondence with BinckBank’s management and supervisory board, it became abundantly clear to us that the management of BinckBank was determined to pursue a business strategy that we deemed to have a low probability of generating satisfactory results for shareholders. We also deem management’s strategy to be clearly inferior to other strategic alternatives that are, in all likelihood, readily available to the company. Furthermore, we expect that the company’s chosen path will continue to produce value-destructive results.
Given that Dutch corporate governance structures create almost unrivalled levels of management and board entrenchment, we were left us with no reasonable alternative but to sell the position. It was a disappointing outcome on many levels.
IMPORTANT INFORMATION
This publication does not constitute an offer or solicitation of any transaction in any securities. Any recommendation contained herein may not be suitable for all investors. Information contained in this publication has been obtained from sources we believe to be reliable, but cannot be guaranteed.
The information in this portfolio manager letter represents the opinions of the portfolio manager(s) and is not intended to be a forecast of future events, a guarantee of future results or investment advice. Views expressed are those of the portfolio manager(s) and may differ from those of other portfolio managers or of the firm as a whole. Also, please note that any discussion of the Fund’s holdings, the Fund’s performance, and the portfolio manager(s) views are as of June 30, 2017 (except as otherwise stated), and are subject to change without notice. Certain information contained in this letter constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe,” or the negatives thereof (such as “may not,” “should not,” “are not expected to,” etc.) or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of any fund may differ materially from those reflected or contemplated in any such forward-looking statement. Current performance results may be lower or higher than performance numbers quoted in certain letters to shareholders.
Date of first use of portfolio manager commentary: July 19, 2017
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Third Avenue Funds are offered by prospectus only. The prospectus contains important information, including investment objectives, risks, advisory fees and expenses. Please read the prospectus carefully before investing in the Funds. Investment return and principal value fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. For updated information or a copy of our prospectus, please call 1-800-443-1021 or go to our web site at www.thirdave.com. Distributor of Third Avenue Funds: Foreside Fund Services, LLC.
Current performance results may be lower or higher than performance numbers quoted in certain letters to shareholders.
About The Author: Matthew Fine
Mr. Fine is the Lead Portfolio Manager of Third Avenue’s International strategies —the Third Avenue International Value Fund and the Third Avenue International Value Fund UCITS—and a member of Third Avenue’s Management Committee. As member of Third Avenue’s Management Committee, Mr. Fine contributes in defining and implementing the firm’s strategic goals
Mr. Fine joined Third Avenue in 2000 and began working with Third Avenue’s international team in an effort to identify investment opportunities in the wake of the Argentine crisis of 2001. Mr. Fine has extensive global investment experience having been responsible for myriad investments in developed and developing markets across North America, Latin America, Europe and Asia.
Mr. Fine joined Third Avenue’s research and portfolio management team as a Research Associate, the first position typically held by Third Avenue’s internally developed talent. He became a Senior Research Analyst in 2008, a principal of the firm in 2009 and Lead Manager of the Third Avenue International Value Fund in 2014.
Mr. Fine holds a B.A. in Economics from Hamilton College. He is a CFA Charterholder, a member of the New York Society of Security Analysts and a member of the Board of Trustees of Suffield Academy.
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