T h i r d Av e n u e Va l u e F u n d

T h i r d Av e n u e S m a l l - C a p Va l u e F u n d

T h i r d Av e n u e R e a l E s t a t e Va l u e F u n d

T h i r d Av e n u e I n t e r n a t i o n a l Va l u e F u n d

LETTERS TO OUR SHAREHOLDERS

First Quarter Commentary
January 31, 2009
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 these portfolio manager letters represents the opinions of the individual
portfolio manager 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 and
may differ from those of other portfolio managers or of the firm as a whole. Also, please
note that any discussion of the Funds’ holdings, the Funds’ performance, and the portfolio
managers’ views are as of January 31, 2009, and are subject to change without notice.
Third Avenue Funds are offered by prospectus only. Prospectuses contain more complete
information on advisory fees, distribution charges, and other expenses and should be read
carefully before investing or sending money. Please read the prospectus and carefully
consider investment objectives, risks, charges and expenses before you send money. Past
performance is no guarantee of future results. Investment return and principal value will
fluctuate so that an investor’s shares, when redeemed, may be worth more or less than
original cost.
If you should have any questions, please call 1-800-443-1021, or visit our web site at:
www.thirdave.com, for the most recent month-end performance data or a copy of our
prospectus. Current performance results may be lower or higher than performance numbers
quoted in certain letters to shareholders.
M.J. Whitman LLC, Distributor. Date of first use February 17, 2009.
 Third Avenue Value Fund
Principal Amount or
Number of Shares Positions Increased
$66,104,000 Forest City Parent Company Senior
Unsecured Debentures
(“Forest City Seniors”)
$10,367,000 GMAC 73⁄4% Senior Unsecured Debt
due 1/19/2010 (“GMAC 73⁄4%”)
$5,000,000 MBIA Insurance Corp. 14% Surplus
Notes (“MBIA Surplus Notes”)
2,199,300 shares Forest City Enterprises Class A
MARTIN J. WHITMAN IAN LAPEY Common Stock
(“Forest City Common”)
CO-CHIEF INVESTMENT OFFICER SENIOR RESEARCH ANALYST
& PORTFOLIO MANAGER OF 54,500 shares POSCO ADRs
THIRD AVENUE VALUE FUND (“POSCO Common”)
Positions Decreased
$12,000,000 GMAC 71⁄4% Senior Unsecured Debt
Dear Fellow Shareholders: Due 2011 (“GMAC 71⁄4%”)
At January 31, 2009, the unaudited net asset value 1,939,812 shares St. Joe Common Stock
attributed to the 138,141,731 shares outstanding of the (“St. Joe Common”)
Third Avenue Value Fund (“TAVF”, “Third Avenue”, or 5,669,417 shares AVX Corp. Common Stock
the “Fund”) was $31.08 per share. This compares with an (“AVX Common”)
audited net asset value of $34.97 per share at October 31, Positions Eliminated
2008; and an unaudited net asset value of $56.85 per share
594,300 shares Alamo Group Common Stock
at January 31, 2008, both adjusted for a subsequent
(“Alamo Common”)
distribution to shareholders. At February 13, 2009, the
unaudited net asset value was $30.52 per share. 36,648 shares Homefed Corp. Common Stock
(“Homefed Common”)
QUARTERLY ACTIVITY 8,151,000 shares Mitsubishi Estate Common Stock
Principal activities during the quarter were as follows: (“Mitsubishi Common”)
Principal Amount New Position Acquired 7,970,000 shares Mitsui Fudosan Common Stock
(“Mitsui Common”)
$78,750,000 Nortel Networks Senior Unsecured Debt
(“Nortel Seniors”) 5,148,000 shares Power Corp. of Canada Common Stock
(Power Corp. Common”)
* Portfolio holdings are subject to change without notice. The following is a list of Third Avenue Value Fund’s 10 largest issuers,
and the percentage of the total net assets each represented, as of January 31, 2009: Cheung Kong Holdings, 11.56%; Henderson
Land Development Co., Ltd., 10.64%; Toyota Industries Corp., 8.64%; MBIA, 6.61%; POSCO (ADR), 5.18%; Wheelock &
Co., Ltd., 3.73%; Brookfield Asset Management, 3.67%; Covanta Holding Corp., 3.55%; Bank of New York Mellon, 3.30%; and
Nabors Industries, Ltd., 2.83%.

1
Number of Shares Positions Eliminated (continued)
47,457 shares Sears Holding Common Stock
(Sears Common”)
480,500 shares Standex International Common Stock
(“Standex Common”)
1,697,500 shares Tokio Marine Holdings Common Stock
(“Tokio Marine Common”)
139,212 shares Westwood Holdings Group Common
Stock (“Westwood Common”)
Except for the sale of the GMAC 71⁄4%s, all the other
securities sales were solely for the purpose of raising cash to
meet redemptions. During the quarter ended January 31,
2009, the number of shares of TAVF outstanding
decreased by 9.3%, or by 14.2 million shares.
The Fund owns three issues of GMAC Senior Unsecureds
which were acquired at yields to maturity of 30% to 50%
on the theory that the probabilities were that the
instruments would remain performing loans over their
lives. Since purchase, these GMAC Senior Unsecureds
have become materially credit enhanced, as GMAC
became a bank holding company receiving funds from the
government Troubled Asset Relief Program (“TARP”) the
repayment of which is subordinate to the Senior
Unsecureds. Also, GMAC received an equity infusion
from General Motors. Against this background, Fund
management decided to sell the GMAC Senior
Unsecureds at a dollar price equal to a yield to maturity of
12%, or less. The only sale completed during the quarter
were for $12,000,000 principal amount of 71⁄4%s.
The Nortel Seniors were acquired at around 17¢ on the
dollar. Nortel, a giant world-wide provider of
telecommunications services and equipment, is now in
bankruptcy operating under the Canadian CCAA
Bankruptcy Statute and U.S. Chapter 11. It appears as if
the sale of the company, or much of its asset base, to a
financially strong U.S. telecommunications company is a
reasonable prospect. However, much uncertainty attaches
to Nortel. There is comfort, though, in the 17¢ price and
2
in the knowledge that the Nortel Seniors are the most
senior issue in the Nortel capitalization.
The Forest City Seniors, the GMAC 73⁄4%s, and the MBIA
Surplus Notes were acquired at yields to maturity of 26%
or better. These are far higher yields for performing loans
than anything we remember in our careers, which stretch
back to 1950. Analysis suggests strongly that all three loans
are likely to remain performing loans over their lives, or in
MBIA’s case, until call in January 2013. The probability of
them remaining performing loans seems to be on the order
of 70% to 80%. However, if MBIA must undergo a
reorganization or rehabilitation, Fund Management
estimates that little or no loss will be suffered by holding
these credit instruments. Assuming that the loans stay
performing loans, little, or no, attention need be paid to
market prices. Held to maturity, or call, the return on the
investments will be approximately 26%, or better. One
drawback that ought to be noted about these distress debt
investments is that for U.S. tax purposes, income,
including interest and all or a portion of any realized
gains, is likely to be taxable as ordinary income, as opposed
to capital gain.
Forest City Common and POSCO Common were
acquired at prices that seem to reflect deep depression
economic conditions. The long-term upside potential for
both issues appears to be huge.
THERE REALLY IS NO PLACE TO HIDE UNLESS YOU CAN PICK A MARKET
BOTTOM—FUND MANAGEMENT CAN’T
The multi-trillion dollar stimulus packages could result in
rampant inflation during the next two to three years. The
stimulus packages don’t necessarily have to have an
inflationary result, but they easily could. If so, the worst
place to have funds invested is in cash or cash equivalents
such as U.S. Treasuries paying, say, 2% to 4% interest.
Holders of such assets could suffer a very meaningful
decline in real income, even though their income
measured in money terms would be safe.
To guard against this inflation possibility (or probability),
both of us have been relatively heavy buyers of TAVF
common shares during 2009 and in the last six months of
2008. Martin Whitman has acquired over $3 million of
Third Avenue Value Fund shares and Ian Lapey has
acquired $550,000. Given the great uncertainties,
however, neither of us has borrowed any money to make
these investments.
INVESTING IN NET-NETS
About three quarters of the Fund’s common stock
portfolio are invested in what Fund Management describes
as Net-Nets. A Net-Net is defined as a common stock issue
where the market value of high quality assets, usually
readily saleable, exceeds by a comfortable margin the
market value of the company’s equity capitalization after
deducting all liabilities.
The concept of Net-Nets was invented by Graham and
Dodd, the godfathers of value investing. Third Avenue has
refined the Graham and Dodd definition of Net-Nets.
Graham and Dodd define Net-Nets on pages 561 and 562
of the 1962 edition of Security Analysis, Principles and
Technique as follows:
“Net-Current-Asset Value – We feel on more solid ground in
discussing these cases in which the market price or the computed
value based on earnings and dividends is less than the net
current assets applicable to the common stock. [The reader will
recall that in this computation we deduct all obligations and
preferred stock from the working capital to determine the
balance for the common.] From long experience with this type
of situation we can say that it is always interesting, and that
the purchase of a diversified group of companies on this
‘bargain basis’ is almost certain to result profitably within a
reasonable period of time. One reason for calling such purchases
bargain issues is that usually net-current asset values may be
considered a conservative measure of liquidation value. Thus as
a practical matter such companies could be disposed of for not
less than their working capital, if that capital is conservatively
stated. It is a general rule that at least enough can be realized
3
for the plant account and miscellaneous assets to offset any
shrinkage sustained in the process of turning current assets into
cash. [This rule would nearly always apply to a negotiated sale
of the business to some reasonably interested buyer.] The
working capital value behind a common stock can be readily
computed. Consequently, by using this figure (i.e., net net asset
value) as the equivalent of ‘minimum liquidating value’ we
can discuss with some degree of confidence the actual
relationship between the market price of a stock and the
realizable value of the business.”
While Graham and Dodd seem to have invented the idea
of Net-Nets, TAVF uses that idea with a number of
modifications. First, the Fund is not interested in Net-Nets
unless the company is extremely well financed. A large
quantity of current assets, especially if they consist of
inventories, billings in excess of costs, or receivables from
less than credit-worthy customers, probably cannot help
the common stock of a company which cannot meet its
obligations to its creditors. Second, many current assets
classified as current assets under Generally Accepted
Accounting Principles (“GAAP”) are really fixed assets of
the worst sort. Take department store merchandise
inventories. If the department store is to be liquidated,
merchandise inventories are indeed a current asset,
convertible to cash within 12 months at prices that
conceivably could be close to book value, although much
less than book value may be realized if the merchandise is
disposed of in a GOB (Going Out of Business) sale. On
the other hand, if the department store is a going concern,
merchandise inventories are a fixed asset of the worst sort.
The merchandise inventories have to be replaced, are hard
to value, and are subject to markdowns, obsolescence,
shrinkage, seasonality and misallocation. The Toyota
Industries portfolio of marketable securities, the majority
of which consists of Toyota Motor Common Stock, seems
to be much more of a current asset than department store
merchandise inventories even though, for GAAP purposes,
Toyota Industries’ marketable securities are not considered
a current asset. Third, the Graham and Dodd formulation
does not account for off-balance sheet liabilities which
may, or may not, be disclosed in footnotes; nor do Graham Motors, Ford or Chrysler were to cease operations in North
and Dodd take into account excessive expenses or losses. America. No part of the real estate and private equity
At TAVF, such expenses or losses are capitalized and added worlds seem better situated for rapid growth than mainland
to liabilities. Fourth, Graham and Dodd only seem to China. All of the companies in Hong Kong in which TAVF
recognize partially that certain fixed assets, e.g., property, has invested have huge presences in mainland China.
plant and equipment, can sometimes create cash. For
A CASE FOR MUTUAL FUNDS
example, under Section 1231 of the U.S. Internal Revenue
Code, the sale at a loss of such assets used in a trade or During the Bear Market of 2008, there seemed to be
business, usually gives rise to an ordinary loss for income nowhere for investors to hide other than in Treasury
tax purposes. Such loss will generally produce cash savings bonds, though as we point out above, that also has its
by reducing current year tax liability, or if the business has
problems. As we have discussed in previous letters, the
an overall operating loss, the corporation may be able to 2008 performance of TAVF was dismal. However, we have
get a “quickie” cash refund of certain prior year taxes from continued to increase our personal holdings in TAVF
the IRS. because we believe that the
The identification of Net-Nets has “. . . we have continued to portfolio is currently very
not proved that difficult for the increase our personal holdings attractive, and we believe that the
probabilities favor that long-term
Fund, even though most of the
new investments now are outside
in TAVF because we believe that investors in the Fund will be
the United States. The toughest the portfolio is currently very rewarded by the extraordinary
opportunities presented by the
problem faced by TAVF, by far, is attractive, and we believe that current markets.
to identify managements and
control groups of these Net-Nets the probabilities favor that long- This is not the case for many
who are both able and conscious term investors in the Fund will investors in hedge funds, private
of the interests of outside, passive, be rewarded by the extraordinary equity funds or, most of all, Ponzi
minority investors, such as Third schemes, such as the one alleged
Avenue. opportunities presented by the in the Bernard Madoff scandal.
When all is said and done, current markets.” During the fourth quarter of
2008, there were almost daily
however, TAVF Management
reports of large, well-regarded
owes an enormous debt of gratitude to Graham and Dodd
hedge funds restricting investor redemptions. Some hedge
for introducing the concept of Net-Nets. It remains the
funds that used excessive leverage were wiped out after a
most important single part of the Fund’s common stock
few years of strong performance that richly rewarded their
portfolio.
managers because of their yearly incentive fee structure.
Also in the Net-Nets in the Fund’s portfolio, TAVF Many private equity funds that bought companies at the
Management likes to focus on common stocks where we peak of the market using extraordinary leverage have been
think the prospects are good that over the next five years net exercising capital calls in apparent support of these ill-fated
asset values will be increasing by not less than 10% per year investments. Worst of all, recently uncovered cases of
compounded. For example, in the case of Toyota potential fraud, such as those involving Madoff and Tom
Industries, Toyota Motor’s market penetration may be Petters, appear likely to result in almost complete wipe-
poised to increase dramatically, especially if General outs for many investors.

4
Investors in mutual funds, like TAVF, seem immune to
Ponzi schemes. Funds registered under the Investment
Company Act of 1940, as amended, offer the following
protections and advantages compared to some other forms
of investment vehicles:
• Highly Regulated. Mutual funds are heavily
regulated under the Investment Company Act of
1940, as amended. The Fund is required to be
diversified. Transactions with affiliates are subject to
extreme scrutiny. TAVF has an independent board
and custodian (Custodial Trust Company/JPMorgan
Chase) and is audited by PricewaterhouseCoopers.
The Fund engages prominent law firms, such as
Skadden Arps, for legal advice.
• No Leverage. TAVF does not use leverage. The Fund
can only borrow for emergency purposes and such
borrowings are limited to 5% of total assets.
Additionally, the non-distress portion of the Fund
(88% of assets) consists of extremely well-financed
common stocks and cash.
• Low Fees. TAVF has an annual expense ratio of
1.1%. There is no incentive fee. This structure
encourages Fund Management to focus on the long
term as opposed to short-term investment
performance. Furthermore, given low turnover rates,
TAVF investors enjoy very low transaction costs.
Total costs to investors – low expenses, low
transaction costs and no sales loads – are markedly
low compared with hedge funds.
• Transparency. TAVF is priced daily. The vast
majority (99.5%) of the positions are valued based
on market prices. The full portfolio is published
quarterly, along with letters that share our thoughts
5
on the portfolio and other topics. Monthly portfolio
summaries, consisting of the top 10 holdings along
with sector and geographic breakdowns, are also
posted on our web site.
• Daily Liquidity. TAVF offers daily liquidity to its
investors. The only restriction is a 1% redemption fee
for shares held less than 60 days to discourage market
timing. Despite significant outflows in 2008, Fund
Management met all redemption requests on a timely
basis while maintaining a cash cushion equal to 8.2%
of net assets as of January 31, 2009.
• Management Ownership. At Third Avenue we “eat
our own cooking.” As of January 31, 2009, Martin
Whitman (and his wife), and Ian Lapey (and his
wife) held over 1,700,000 and 30,000 shares of
TAVF, respectively. These shares are fully vested and
were purchased with cash at market value (net asset
value) at the time of the purchase.
We shall write you again after the April 30, 2009 quarter end.
Martin J. Whitman
Chairman of the Board
Ian Lapey
Senior Research Analyst
 Third Avenue Small-Cap Value Fund
Number of Shares,
Rights or Face Amount New Positions Acquired
$22,475,000 W&T Offshore, Inc. 8.25% Senior
Notes Due June 15, 2014
(“WTI Senior Notes”)
3,390,400 rights Timberwest Forest Corp. Rights
(“Timberwest Rights”)
CURTIS R. JENSEN Positions Increased
CO-CHIEF INVESTMENT OFFICER &
$13,000,000 Ply Gem Industries 11.75% First Lien
PORTFOLIO MANAGER OF THIRD AVENUE
Secured Notes Due June 15, 2013
SMALL-CAP VALUE FUND (“Ply Gem Notes”)
$13,500,000 Saint Acquisition Term Loan B Due
Dear Fellow Shareholders: May 6, 2014 (“Swift Bank Debt”)
At January 31, 2009, the end of the Fund’s fiscal first 264,010 shares Ackermans & van Haaren N.V.
quarter, the unaudited net asset value attributable to the (“AvH Common”)
83,876,027 common shares outstanding of the Third 7,796 shares Alexander & Baldwin, Inc.
Avenue Small-Cap Value Fund (“Small-Cap Value” or the (“Alex Common”)
“Fund”) was $13.32 per share, compared with the Fund’s 225,600 shares Bristow Group, Inc. Common Stock
audited net asset value of $15.56 per share at October 31, (“Bristow Common”)
2008, and an unaudited net asset value at January 31,
75,000 shares Cimarex Energy Co., Common Stock
2008 of $22.02 per share, both adjusted for a subsequent (“Cimarex Common”)
distribution. At February 13, 2009, the unaudited net
asset value was $13.49 per share. 462,544 shares Cross Country Healthcare, Inc.
Common Stock
QUARTERLY ACTIVITY (“Cross Country Common”)
During the quarter, Small-Cap Value established two new 270,493 shares Derwent London Plc Common Stock
(“Derwent Common”)
positions, added to 15 of its 68 existing positions,
eliminated one position and reduced its holdings in nine 201,400 shares Genesee & Wyoming Inc. Common
companies. At January 31, 2009, Small-Cap Value held Stock (“Genesee Common”)
positions in 64 common stocks, the top 10 positions of 556,419 shares Investment Technology Group, Inc.
which accounted for approximately 34% of the Fund’s net (“ITG Common”)
assets. 75,000 shares Lanxess AG Common Stock
(“Lanxess Common”)

* Portfolio holdings are subject to change without notice. The following is a list of Third Avenue Small-Cap Value Fund’s
10 largest issuers, and the percentage of the total net assets each represented, as of January 31, 2009: Parco Co., Ltd., 4.40%;
Sapporo Holdings, Ltd., 4.18%; Viterra, Inc., 3.49%; Tidewater, Inc., 3.45%; Synopsys, Inc., 3.39%; St. Mary Land and
Exploration Co., 3.36%; Encore Wire Corp., 3.14%; Lanxess AG, 3.01%; Brookfield Asset Management, 2.97%; and
Ackermans & van Haaren NV, 2.88%.

6
Number of Shares Positions Increased (continued) QUARTERLY ACTIVITY
94,000 shares Parco Company Ltd. Common Stock As I like to say, pessimism, scorn and adversity can be the
(“Parco Common”) friends of a long-term investor like the Fund, and each of
75,000 shares St. Mary Land and Exploration Co., these “friends” contributed to the utter chaos that marked
Common Stock (“St. Mary Common”) the closing chapters of 2008. As a point of reference, more
170,500 shares Synopsys, Inc. Common Stock than 85% of the Fund’s 35%1 decline in value during the
(“Synopsys Common”) 2008 calendar year occurred between Labor Day and
229,845 shares Vail Resorts, Inc. Common Stock Halloween. On many days it felt as if the Fund was the
(“Vail Common”) buyer of last resort. While painful as holders of risked
Positions Decreased capital, the tumultuous and rapidly deteriorating market
conditions enabled Fund Management to expand both its
132,878 shares Arch Capital Group, Ltd. Common
Stock (“Arch Common”)
existing equity holdings and its burgeoning stable of
distressed debt ideas at ever improving prices.
1,234,100 shares Canfor Corp. Common Stock
(“Canfor Common”) In the quarter ended January 31, 2009, Fund Management
239,200 shares CommScope, Inc. Common Stock initiated a new position in WTI Senior Notes, the Fund’s
(“CommScope Common”) fourth distressed debt holding. The WTI Notes, issued in
30,741 shares FBL Financial Group, Inc. Common June 2007 in unregistered form2, are senior obligations of
Stock (“FBL Common”) W&T Offshore, an independent oil and gas exploration
and production company with its primary assets in the
157,867 shares Haverty Furniture Co., Inc. Common
Stock (“Haverty Common”)
U.S. Gulf of Mexico. At least three forces conspired to
create the opportunity in the WTI Notes: i) pessimism
422,508 shares Herley Industries, Inc. Common Stock engulfed virtually all oil and gas related names during the
(“Herley Common”)
last half of the year, as commodity prices tumbled from
10,000 shares Lexmark International, Inc. Common their record summer peaks – W&T common stock, for
Stock (“Lexmark Common”) example, fell from a high of $58 per share in June to a low
28,500 shares Superior Industries International, Inc. of $10 per share in December; ii) Gulf of Mexico-exposed
Common Stock (“Superior Common”) producers, in particular, came under additional pressure
125,000 shares Sybase, Inc. Common Stock during the fall as Hurricanes Ike and Gustav interrupted
(“Sybase Common”) production in the region; and iii) forced selling at year-end
Positions Eliminated by leveraged pools of capital (e.g., hedge funds, bank
175,000 shares Whiting Petroleum Corporation
trading desks, insurance companies) exacerbated already
Common Stock (“Whiting Common”) intense downward pressure on securities prices and
orphaned many less liquid instruments like the WTI
Notes. In these circumstances, we like to think of our job as
issuers of “exit visas from Hell.3”
1
The Fund’s five-year and ten-year average annual returns for the period ended December 31, 2008 were -0.08% and 6.38%, respectively.
2
The securities were originally sold to qualified institutional buyers without being registered under the Securities Act of 1933, as
amended, in compliance with the exemption from registration provided by Rule 144A under the Securities Act.
3
The phrase “exit visas from Hell” was made most famous, in my mind, by Jack Byrne, the former Chairman of White
Mountains Insurance.

7
While W&T management has struggled to evidence
organic growth in reserves and production, and while
offshore oil and gas producers are, more generally
speaking, fraught with higher operational risk, from a
creditor’s perspective, like that of the Fund, there appears
to be significant downside protection, including:
i) A management team that, as majority-owners of the
common stock, overtly manages for high margins
and cash generation;
ii) As implied by the Fund’s cost basis in the Notes, a
conservative valuation of W&T’s reserves and
acreage, even allowing for a dramatic year-end asset
impairment required under GAAP accounting;
iii) Reasonable protection in the
form of sensible covenants
embedded within the
company’s bank credit facility
as well as in the terms of the
Notes;
iv) Strong liquidity with $350 million of cash and an
undrawn, fully available bank revolver totaling $500
million as of December 31, 2008.
Should commodity prices remain depressed in coming
periods, as seems likely, W&T’s reported earnings and cash
flow ought to fall dramatically this year, as the company
has little hedging in place for 2009. Given the company’s
acquisitive history and strong liquidity, it seems likely that
management could embark on another acquisition this
year. One source of comfort in such a potentially risky
scenario is that asset prices are generally very depressed,
and a thoughtful deal could make a lot of economic sense,
particularly if it extends the company’s relatively short
reserve life, lowers the company’s persistently high finding
and development costs or brings a higher degree of
repeatability to the drilling program.
4
Source: Financial Times, October 9, 2008
8
Our expectation is that the WTI Notes have a high
probability of remaining performing credits. The Fund’s
cost basis, near 60% of face value, implies a yield to
maturity of nearly 20%, a 13% current yield, and a yield
to first call (2011) of nearly 30%. These return profiles
meet Fund Management’s definition of “equity-like
returns” and seem attractive relative to the business risk.
Within the distressed debt portion of the Fund - which
stood at roughly five percent of assets at period end - Fund
Management also added significantly to its positions in Ply
Gem Notes and Swift Bank Debt. The experience of
building a position in distressed debt at year-end 2008 was
nothing short of excruciating, as every purchase seemed to
be followed by another precipitous drop in prices. If you
can imagine a Black Friday sale
being followed by a Black
Monday sale and then a Black
Tuesday sale and so on through
the whole week, then you get the
picture. We continuously reviewed
our investment theses, backed up our bids and continued to
build positions as much as the Fund’s liquidity would allow.
For the moment, the torrent of selling has abated and we
continue to monitor both the market and numerous
individual securities for more opportunities in distressed
debt, more on which follows below.
RUMMAGING THROUGH WALL STREET’S GARBAGE BINS
Fund Management’s attraction to the opportunities in
distressed debt investing deepened during the last half of
2008. Newspaper headlines, like the one above4, recognized
that something unusual was happening in the world’s
capital markets and that the phenomenon would likely
persist for a time: mark-to-market accounting had collided
violently with highly-leveraged institutional investors and
other pools of capital, which became involuntarily
desperate sellers of marked down merchandise. The Bear
Stearns meltdown, the rescue of AIG and the world’s largest
bankruptcy case (that of Lehman Brothers) were the most

Time Period Institution Type
2003 – First Banks, insurance companies, CLOs,
Half 2007 High Yield Funds, Securities Firms,
Hedge Funds – “First Generation,
par owners”
Second Half High Yield Funds, Hedge Funds,
2007 – First Private Equity Vehicles – “Second
Half 2008 Generation owners”
Second Half Third Avenue Funds; dedicated workout
2008 – ? or distressed funds – “Third Generation”
vivid portrayals of this financial death spiral. It became
apparent that many of these institutions simply could not
hold on, and would be forced to find a buyer, seek
protection from their creditors or jettison assets off their
balance sheets like a stricken airliner dumping fuel before a
crash landing. The table above attempts to illustrate – in
very simplified form - the odyssey made by hundreds of
billions of dollars of bank loans and bonds during the past
few years, as the credit party really got rolling.
Fund Management’s philosophy, expectations and “rules of
the road” for the distressed debt portion of the Fund follow
below.
• Invest with a bias toward the senior most obligations
of an issuer. Going lower in the capital structure may
be prudent only in certain circumstances (e.g., where
large holders are believed to have accumulated
positions in more than one class, a tactic that can
muddy the reorganization waters). In cases where
there is a higher probability of default, covenant
breach or formal restructuring, this means owning
bank debt. We’ll happily trade off an element of
return for an added level of safety.
• Historic recovery rates of the past 15 to 20 years in
high yield bonds and leveraged loans may be
meaningless as guideposts inasmuch as the current
economic downturn is likely to rival anything the U.S.
has experienced in the post war period (i.e., default
Typical Purchase Price
(as % of face value) Comments/Examples
90% - 100% Institutions characterized by high financial
leverage, in some cases extreme (e.g., 20:1).
Some institutions regulated, others
governed by murky contracts. Dividend
recapitalizations, private equity buyouts.
70% - 80% Moderately leveraged vehicles (e.g., 2:1).
PE and Hedge Funds purchasing/trading
“busted” buyout debt.
30% - 60% Unleveraged, longer-term holders with
bankruptcy competence.
rates ought to be much higher than in the past), and as
corporate debt levels – certainly within the buyout
context – were much higher than in the past.
• Return profiles ought to account not only for
underlying business/reorganization risk, but are
competitive with prospective returns in competing
equity instruments.
• Owning a piece of distressed debt may allow the
holder an additional path toward value enhancement
inasmuch as it offers the chance to participate in a re-
organization or restructuring. The “value through
restructuring” option contrasts with the avenues
available to passive owners of equities, who generally
do not initiate restructuring events.
• Unlike a common stock dividend, owning an interest-
bearing instrument allows the Fund to get current
income in the form of a legally binding contract while
waiting for business conditions to improve.
• To the extent deflationary forces (e.g., industry
overcapacity or oversupply) pressure asset and business
values, equity holders will absorb the lion’s share of the
squeeze on those values (conversely, if inflationary
forces take hold, then the holders of residual interests
in assets ought to benefit even more than debt
holders).
9
• In cases where we assume a performing credit, credit I look forward to writing you again in when we publish
markets, in general, will have to attain a modest level our Second Quarter Report, dated April 30, 2009. Thank
of repair before the earliest debt maturities come due you for your continued support.
(e.g., 2012 – 2014 and beyond) in order that Sincerely,
borrowers will be able to refinance the debt if need be.
Some fragile signs of healing in credit markets have
already emerged (e.g., the drop in inter bank lending
rates; falling spreads on corporate debt; and recent Curtis R. Jensen
large bond issues by investment grade borrowers). Co-Chief Investment Officer and Portfolio Manager
Third Avenue Small-Cap Value Fund
• Fund Management will attempt to diversify by
acquiring securities that are likely to be performing
credits versus workouts that will tend to utilize a much
higher level of our internal research resources.

10
 Third Avenue Real Estate Value Fund
Number of Shares
or Principal Amount New Positions Acquired (continued)
$12,500,000 Brandywine Operating Partnership
3.875% Convertible Senior Notes
putable October 2011
(“Brandywine Senior Notes”)
$3,000,000 General Growth Properties Term Loan
MICHAEL H. WINER Tranche A due February 2010
PORTFOLIO MANAGER OF THIRD AVENUE (“General Growth Term Loan”)
REAL ESTATE VALUE FUND $3,000,000 LandSource Communities First Lien
DIP Revolver due May 2009
(“LandSource DIP Loan”)
Dear Fellow Shareholders: $25,000,000 Macerich Company 3.25% Convertible
At January 31, 2009, the end of the first fiscal quarter of Senior Notes putable March 2012
2009, the unaudited net asset value attributable to the (“Macerich Senior Notes”)
71,506,234 shares outstanding of the Third Avenue Real Positions Increased
Estate Value Fund (the “Fund”) was $13.46 per share. This $2,203,310 LandSource Communities Development
compares with an audited net asset value of $15.78 per LLC Senior Term Loan due May 2009
share at October 31, 2008, and an unaudited net asset (“LandSource Senior Term Loan”)
value of $27.12 per share at January 31, 2008, both
$14,400,000 LNR Property Corp. Floating Rate
adjusted for subsequent distributions to shareholders. At
Senior Term Loan due July 2011
February 13, 2009, the unaudited net asset value was
(“LNR Senior Term Loan”)
$12.90 per share.
1,000,000 shares Forest City Enterprises, Inc. Class A
QUARTERLY ACTIVITY Common Stock (“Forest City
Common”)
The following summarizes the Fund’s investment activity
during the quarter: 1,800,000 shares ProLogis Common Stock
(“ProLogis Common”)
Principal Amount New Positions Acquired
Positions Decreased
$6,215,000 Brookfield Asset Management, Inc.
7.13% Senior Notes due June 2012 41,152 shares Associated Estates Realty Corp.
(“Brookfield Senior Notes”) Common Stock
(“Associated Common”)

* Portfolio holdings are subject to change without notice. The following is a list of Third Avenue Real Estate Value Fund’s
10 largest issuers, and the percentage of the total net assets each represented, as of January 31, 2009: Brookfield Asset Management,
8.32%; Henderson Land Development Co., Ltd., 7.30%; Forest City Enterprises, Inc., 6.57%; ProLogis, 5.74%; Wheelock &
Co., Ltd., 5.61%; Hang Lung Properties, Ltd., 5.11%; The St. Joe Company, 4.94%; Mitsui Fudosan Co., Ltd., 4.22%; Vornado
Realty Trust, 4.13%; and Mitsubishi Estate Co., Ltd., 4.09%.

11
Number of Shares Positions Decreased (continued) concentration of properties in Arizona and California.
200,500 shares British Land Company plc Common Those markets continue to be disproportionately affected
Stock (“British Land Common”) by the slump in the residential market, which has led to
50,000 shares Brookfield Asset Management declining sales and slowing leasing activity at a number of
Common Stock (“Brookfield Asset the company’s properties. In addition to deteriorating
Management Common”) fundamentals, Macerich is facing about $3 billion of debt
maturities over the next three years. Notwithstanding weak
16,800 shares Cousins Properties, Inc. Common
Stock (“Cousins Common”)
business fundamentals, the company’s high quality assets
and management’s strong track record as an operator leads
653,200 shares Parco Company Ltd. Common Stock us to believe that Macerich will be able to utilize its asset
(“Parco Common”)
base to meet its maturities and preserve the company’s
1,341,000 shares Wheelock & Co Ltd. Common Stock equity value. If we are wrong and the company defaults on
(“Wheelock Common”) its debt obligations, the Senior Notes appear to be fully
Positions Eliminated covered in any restructuring scenario.
260,374 shares Crystal River Capital, Inc. Common Brandywine Realty is a U.S. REIT that owns suburban
Stock (“Crystal River Common”) office properties, largely concentrated in Philadelphia and
15,000 shares JER Investors Trust, Inc. Common Washington, D.C. The portfolio is not located in high-
Stock (“JER Investors Common”) barrier-to-entry markets, which limits the prospects for
significant appreciation in property values over the long
DISCUSSION OF QUARTERLY ACTIVITY
term. However, Brandywine’s portfolio is more than 92%
During the quarter ended January 31, 2009, the Fund occupied with a diversified tenant base that provides steady
continued to take advantage of the dislocations in the cash flows. Brandywine will likely face deteriorating
credit markets by adding debt securities trading at fundamentals (albeit not as severe as retail) and, over the
significant discounts to par value with expected yields-to- next three years, it must address about $1.2 billion of debt
maturity, workout, or improved credit rating in excess of maturities. However, the company’s high cash flow
20% at the time of purchase. The Fund’s investments in coverage, manageable debt levels, and approximately $4
debt securities continue to increase, and so long as these billion unencumbered asset base, gives us confidence that
opportunities exist, Fund Management intends to make Brandywine’s Notes will remain performing. In the
the most of its flexible mandate and take advantage of unlikely event of default, the notes should be fully covered
what appears to be superior risk-adjusted returns. The in a restructuring or liquidation.
Fund added to its existing positions in LNR Senior Term The Fund opportunistically acquired Brookfield Senior Notes
Loan and LandSource Senior Term Loan, and initiated at a 20% yield-to-maturity. Given Brookfield’s super-strong
new positions in Brookfield Senior Notes, Brandywine balance sheet and robust cash flows (which it retains as an
Senior Notes, General Growth Term Loan, LandSource operating company), the only explanation for the bargain
DIP Loan, and Macerich Senior Notes. The Fund also pricing is forced selling into a relatively illiquid market.
opportunistically added to Forest City Common and
ProLogis Common. The Fund added to its position in LandSource Senior
Term Loan and acquired a participation in the LandSource
Macerich is a U.S. REIT that owns some of the most DIP Loan at a discount to par value. The LandSource DIP
dominant regional malls across the country, including a large Loan is a revolving credit facility that has super-senior

12
priority in the LandSource bankruptcy. The Loan matures
in May 2009 and should provide an attractive return,
although with a short duration. Fund Management
remains actively involved with the LandSource
restructuring process by serving on the Senior Loan
Steering Committee. We expect that LandSource will
emerge from bankruptcy with an all-equity capital
structure which should enable the company to take
advantage of exceptional long-term prospects given its
prime land in Los Angeles County.
General Growth Properties is one of the largest owners of
regional malls in the U.S. The company grew rapidly
through acquisitions that were
financed primarily with short-
term debt. The company is facing
significant near-term maturities
that it will likely have difficulty “Real estate securities
refinancing in the current market.
The Fund acquired a small
currently offer the highest risk- mark-to-market
interest in General Growth Term adjusted returns Fund
Loan at 22% of par value. There Management has seen since mortgage crisis (which began in
appears to be a high probability
that General Growth will file the inception of the Fund.”
bankruptcy in the near future. In
that event, we expect that there
will be more forced sellers and an
opportunity to acquire more debt
at steep discounts. In either event, we believe that in a
restructuring or liquidation, the General Growth Term
Loan should be fully covered.
The Fund opportunistically increased its holdings in
Forest City Common and ProLogis Common at prices
representing substantial discounts to conservative
estimates of net asset value. The Fund purchased 3.5
million shares of ProLogis Common in late November,
after the ProLogis management presented its plan to
alleviate concerns relating to its large development pipeline
and began executing on that plan. In late December,
ProLogis announced that it was selling its China
13
operations and a stake in its Japanese property funds for
$1.3 billion in cash. This news seemed to allay liquidity
concerns and the stock price increased nearly seven-fold
from its November low. The Fund took advantage of
market pricing and sold 1.7 million shares.
The Fund reduced its positions in several common stocks,
generally for portfolio management reasons, such as
reallocating investments to securities expected to generate
higher risk-adjusted returns.
LONG-TERM, REAL ESTATE OFFERS HIGH RISK-ADJUSTED RETURNS
The Fund reported a loss of 44.7% in 2008, clearly
making it the worst year in the
Fund’s ten-year history. Other
than holding cash in 2008, there
were very few hiding places for
investors to avoid significant
losses. Fund
Management did not foresee the
ripple effect the sub-prime
2007) would have on the global
credit markets and the dramatic
re-pricing of hard assets. The
Fund’s largest detractor during the
year was Forest City Common,
which was down 85% during
2008. Like most real estate companies with significant
exposure to development projects, Forest City Common
was subjected to unprecedented selling pressure caused by
concerns about liquidity and fear of losses on
developments. There is little doubt that Forest City will
face challenges and may incur some losses on development
projects, but Fund Management believes the company’s
financial position is not at risk, and the stock is oversold.
Despite the mark-to-market losses in 2008, the Fund’s
annualized return for the ten years ended December 31,
2008 was 8.4%, which compares very favorably to real
estate securities and general market indices. To wit:
 Annualized Returns as of December 31, 2008
__________________________________________
1-year 3-year 5-year
____________________________________________________________ 10-year
Third Avenue Real Estate Value Fund -44.75% -13.05% -0.76% 8.38%
S&P 500 Index1 -36.55% -8.18% -2.12% -1.36%
Dow Jones Industrial Average2 -33.84% -3.95% -1.07% 1.67%
MSCI World Index3 -39.67% -7.29% 0.13% -2.20%
MSCI US REIT Total Return Index4 -37.97% -11.13% 0.67% 7.18%
FSTE EPRA/NAREIT Global Index5 -43.83% -19.40% -3.96% 0.55%

Historical returns are no predictor of future returns. We do location of assets, management talent, etc.) were not given
not disagree that many industries (including real estate) much analytical weight by most market participants. It was
have yet to feel the full impact of the economic downturn. a bull-market feast that had a euphoric effect on investors.
U.S. commercial real estate, in particular, is likely to face However, behavioral finance studies show that,
higher vacancy rates and lower rental rates, resulting in proportionately, investors dislike losses much more than
declining cash flows. Mortgages for commercial real estate they like gains. We are currently in a period where
and corporate financing for real estate companies are not indicators of uncertainty are at or near all-time highs. The
readily available due to the general lack of credit. U.S. uncertainty leads to fear, which paralyzes investors,
consumers and most industries are convulsing with the consumers and businesses. This behavior, in turn, feeds the
need to de-leverage (which is not the case in Asia). We are crisis which has led to a massive flight from “risky” assets.
paying the price for years of easy credit. However, Despite the fact that real estate is generally comprised of
notwithstanding the current global economic downturn, tangible assets that have the ability to generate recurring
Fund Management believes it is reasonable to assume that cash flow from long-term leases with tenants representing
returns on real estate securities over the next ten years will diversified businesses, investors have fled the sector based
be in-line with or better than the last ten years. The prices on uncertainty and fear. Savvy investors that can afford to
of most real estate securities (common stocks and debt be patient through this period of market volatility and
securities) seem to reflect all of the bad news reported to focus on fundamentals, instead of market sentiment, will
date and expectations of even worsening conditions over be the long-term beneficiaries of today’s bargain prices.
the next few years.
The period of easy money ended in early 2007. The key to
From 2002 through 2006, it was easy to make money in making above-average risk-adjusted returns in real estate
real estate securities. During this period, company over the next five to ten years will be picking the survivors.
fundamentals (e.g., balance sheet strength, quality and Once again, corporate fundamentals matter. Fund
1
The S&P 500 Index is an unmanaged index (with no defined investment objective) of common stocks.
2
The Dow Jones Industrial Average seeks to represent large and well-known U.S. companies. It covers all industries with the
exception of Transportation and Utilities.
3
The MSCI World Index is a free-float weighted equity index, which includes developed world markets, and does not include
emerging markets.
4
The MSCI US REIT Total Return Index is a capitalization-weighted, total return index comprising the most actively traded real
estate investment trusts and is designed to be a measure of real estate equity performance.
5
The FSTE EPRA/NAREIT Global Index is designed to track the performance of listed real estate companies and REITS worldwide.

14
Management has always focused on corporate
fundamentals. It is interesting to note that, during the bull
market, Wall Street analysts were primarily focused on the
income statement and rarely mentioned balance sheet
strength. Lately, however, it is difficult to find a research
report that does not mention financing concerns.
The investment business is a probabilities business. Market
participants talk about risk-adjusted returns and the goal
of earning returns that are at least as good as, or better
than, the rest of the market on a risk-adjusted basis. Every
investment comes with risks including, but not limited to,
investment risk, market risk, credit risk, interest rate risk,
inflation risk, currency risk, etc. Fund Management’s
primary concern is avoiding investment risk – or the risk
that an investment will suffer a permanent impairment of
value. When attempting to analyze the risk/reward ratio,
risk is considered to reflect the probability of not achieving
the expected return (including the probability of incurring
a loss).
Third Avenue is in the probabilities business. Every
investment is thoroughly analyzed using Third Avenue’s
“safe and cheap*” investment approach, in which we
evaluate financial strength, management talent, quality
and quantity of assets and specific issues relating to the
business. We also give appropriate weight to macro-
economic conditions based on our view of how such
factors might affect the long-term viability of the business.
However, after completing our analysis, we still must make
an “educated guess” about probabilities. For instance, if we
are considering the purchase of a corporate bond, we have
to estimate the probability that the bond will perform and
ultimately be paid off at maturity. We also have to estimate
the amount and probability of recovery value in the event
the bond does not perform. Estimating these probabilities
is more art than science. We generally give very little
weight in our analysis to the credit rating or the trading
price of the security. We are much more focused on the
quality and quantity of the company’s resources, covenant
protection in the bond indenture and determining a
* “Safe” means the companies, in our judgment, have strong finances, competent management, and an understandable business.
“Cheap” means that, in our judgment, we can buy the securities for significantly less than what a private buyer might pay for
control of the business.
15
recovery value in the event the debt instrument defaulted
and we have to go through a workout or liquidation.
The following example illustrates the calculation of the
risk-adjusted return of a high-yielding corporate bond
compared to a U.S. Treasury note. In this example it is
assumed that the U.S. Treasury note will earn a 3% return
(the risk-free yield) and the corporate bond has an
expected return of 22% (1,900 basis points over the risk-
free return). We assign a 75% probability that the bond
will perform and pay off at maturity; and a 25%
probability that the bond will default and a workout will
result in a recovery of half the investment.
Risk-
Expected Adjusted
Return Probability Return
U.S. Treasury note 3% 100% 3%
Corporate Bond 22% 75% 16.5%
-50% 25% -12.5%
4.0%
While the expected return on the corporate bond is 22%,
due to the probability that the bond will default and result
in a loss of 50% of our investment, the calculated risk-
adjusted return is 4%. If we could confidently rely on our
assigned probabilities, then it may seem that on a risk-
adjusted basis, the corporate bond is a better investment
than the U.S. Treasury note. In this case, the corporate
bond should earn a risk-adjusted return that is 100 basis
points higher than the risk free return.
The problem with calculating risk-adjusted returns is that
one can never be certain that the estimated probabilities of
expected returns are valid. If the expected investment
holding period in the above example was ten years, there is
a high likelihood that corporate events or macro-economic
conditions during the investment period could
dramatically alter the initial probabilities. Therefore, in
order to compensate for the likelihood of invalid
probabilities, with respect to long-term investments, risk-
adjusted returns should be significantly higher than risk-
free returns (i.e., a significant margin of safety). (Note:
while U.S. Government-backed securities are commonly
referred to as “risk-free,” U.S. Treasuries are clearly subject
to inflation risk. In an inflationary environment, it could
be argued that debt securities backed by income-
producing real estate are safer than U.S. Treasuries.)
Real estate securities currently offer the highest risk-
adjusted returns Fund Management has seen since the
inception of the Fund. The common stocks owned by the
Fund currently trade at an average discount to net asset
value (“NAV”) of 50%. Assuming zero NAV growth, if the
market prices of the Fund’s holdings appreciated to current
NAV over the next three years, this would equate to an
annualized return of 26%. Fund Management believes
there is a much higher probability of earning such returns
than the probability of earning zero or negative returns.
Based on our assigned probabilities (which we caution may
ultimately be wrong), the overall risk-adjusted returns on
the Fund’s equity securities over the next three years should
be in excess of 15% annualized.
The debt securities owned by the Fund (other than
distressed securities) were acquired with expected yields to
maturity averaging greater than 25%. Fund Management
assigns a very high probability that the debt securities will
perform and be paid off at maturity. We assign a very low
probability of default, but believe that even in the event of
default, the Fund will not realize a loss in the workout
process because of the quality and quantity of assets
available to cover our claim. The workout or liquidation of
a real estate company that owns high quality, cash-
generating assets, is a very different type of workout than
most other businesses. In general, the tangible assets (office
buildings, retail centers, industrial buildings, etc.) are
separable from the going-concern of a real estate company.
In fact, these assets, individually, are going-concerns. Each
is an operating business that generates predictable cash
flow, can be financed with non-recourse mortgage debt
and can be sold separately to a multitude of strategic or
financial buyers. On the other hand, the recovery value in
the liquidation of a service business, manufacturer or
retailer is rarely based on the value of tangible assets and,
therefore, much less predictable. The debt securities in the
Fund were all purchased at substantial discounts to par
16
value. Even using draconian assumptions about
liquidation values, we believe that there is a very low
probability of a permanent impairment below the Fund’s
cost basis. Based on our assigned probabilities, the average
risk-adjusted returns on the Fund’s performing debt
securities should be in excess of 15% annualized.
The benefit of investing in performing debt securities is
that the return is not ultimately dependent upon the
market. Debt securities are contractual obligations that
have a defined payment schedule and maturity date. If the
obligor lives up to its contractual obligation and pays off
the debt at maturity, the investment will be a success and
the expected yield will be fully realized. Common stock
investments, on the other hand, are almost always
dependent upon the market (either the public market or
private market). The risk-adjusted returns for equity
securities are typically higher than debt securities, but there
is generally not as much margin of safety.
Third Avenue’s investment approach forces us to focus on
fundamentals. We have the ability to analyze companies
from a creditor’s perspective and the flexibility to invest
anywhere in the capital structure that we believe will
generate above-average risk-adjusted returns. The Fund is
also protected through the geographic diversification of its
holdings, which includes North America, East Asia and
Europe. We expect that our focus on individual company
fundamentals and our long-term view will continue to
serve the Fund’s shareholders well in the coming years.
I look forward to writing to you again, when we publish
our Semi-Annual Shareholder Letter for the period ending
April 30, 2009.
Sincerely,
Michael H. Winer
Portfolio Manager,
Third Avenue Real Estate Value Fund
 Third Avenue International Value Fund
Number of Shares
or Units New Positions Acquired
2,360,000 warrants Dundee Precious Metals, Inc. Warrants
(“Dundee Warrants”)
227,335 shares EnCana Corporation Common Stock
(“EnCana Common”)
Positions Increased
AMIT B. WADHWANEY 4,720,000 shares Dundee Precious Metals, Inc. Common
PORTFOLIO MANAGER OF THIRD Stock (“Dundee Common”)
AVENUE INTERNATIONAL VALUE FUND 42,689 shares L. E. Lundbergforetagen AB Common
Stock (“Lundbergs Common”)
Dear Fellow Shareholders: 19,446,164 shares Netia SA Common Stock (“Netia
Common”)
At January 31, 2009, the unaudited net asset value
attributable to the 89,698,582 shares outstanding of the 156,424 shares Sampo Oyj – A shares (“Sampo
Third Avenue International Value Fund (the “Fund”) was Common”)
$10.77 per share, compared with the Fund’s audited net 86,300 shares Tokio Marine Holdings, Inc. Common
asset value at October 31, 2008 of $11.34 per share, and an Stock (“Tokio Marine Common”)
unaudited net asset value of $18.04 per share at January 31, 2,360,000 shares WBL Corp. Ltd. Common Stock (“WBL
2008, both adjusted for a subsequent distribution to Common”)
shareholders. At February 13, 2009, the unaudited net
Positions Eliminated
asset value was $10.99 per share.
4,873,600 shares BW Gas Limited Common Stock (“BW
QUARTERLY ACTIVITY: Gas Common”)
In the most recent quarter of operations, the Fund 17,295,065 shares Capital Securities Corp. Common
established a new position in the common stock of one Stock (“Capital Securities Common”)
company, added to positions in the common stocks of six 7,567,000 shares Gigabyte Technology Co. Ltd. Common
companies, eliminated holdings in three securities and Stock (“Gigabyte Common”)
reduced holdings in six securities.
Positions Decreased
1,283,125 shares ABB Grain Ltd. Common Stock (“ABB
Common”)
447,200 shares Capital Nomura Securities PCL
Common Stock (“CNS Common”)

* Portfolio holdings are subject to change without notice. The following is a list of Third Avenue International Value Fund’s
10 largest issuers, and the percentage of the total net assets each represented, as of January 31, 2009: WBL Corp., Ltd., 5.85%;
Viterra, 5.24%; ABB Grain, Ltd., 4.56%; Brit Insurance Holdings PLC, 4.00%; Netia S.A., 3.79%; Compagnie Nationale a
Portefeuille, 3.72%; Yuanta Financial Holding Co., Ltd., 3.51%; Munich Re, 3.33%; Sanofi-Aventis SA, 3.00%; and Guoco
Group, Ltd., 2.87%.

17
Number of Shares Positions Decreased (continued)
7,017,097 shares CSR Limited Common Stock (“CSR
Common”)
15,963,100 shares KGI Securities Thailand PCL Common
Stock (“KGI Common”)
6,528,000 shares Liu Chong Hing Investment Ltd.
Common Stock (“LCHI Common”)
5,698,000 shares Vitasoy International Holdings Ltd.
Common Stock (“Vitasoy Common”)
REVIEW OF QUARTERLY ACTIVITY
The single new holding purchased this quarter was
EnCana Common. EnCana Corporation (“EnCana”), an
independent oil and natural gas exploration and
production (E&P) company, is currently the second
largest producer of natural gas in North America (behind
ConocoPhillips). EnCana possesses a portfolio of high-
quality, low-cost assets, as well as a large, undeveloped
acreage position which should support future growth over
the long term. The company benefits from a competent
management team, led by CEO Randall Eresman, which
has produced a solid long-term track record and skillfully
navigated the company through smart acquisitions and the
disposal of non-core assets. The company should also
benefit from its strong financial position, which should
provide the management team with added flexibility
necessary to thrive in the current economic environment.
Negative sentiment towards the industry, primarily
attributable to falling commodity prices and difficult
macroeconomic conditions, enabled us to purchase
EnCana shares at a modest multiple of operating profit,
and at a significant discount to both our conservative
estimate of net asset value and to the value of comparable
transactions in the past. While short-term conditions may
be challenging, we believe in EnCana’s potential to create
value over the long term, given its attractive portfolio of
high-quality assets, strong financial position, proven
management team and track record of solid business
performance.
18
The Fund also subscribed to an offering of units by
Dundee Precious Metals, Inc. (“Dundee”), where the units
were composed of Dundee Common and warrants to
purchase Dundee Common. The proceeds of this offering
are earmarked for the investment necessary to expand
operations at Dundee’s main asset, the Chelopech gold
mine in Bulgaria.
During this quarter, the Fund eliminated its holding in
BW Gas Common. BW Gas, is a Norway-listed company
engaged in the ownership and operation of marine vessels
used to transport Liquified Natural Gas (LNG) and
Liquified Petroleum Gas (LPG). While the company’s
LNG transport vessels operate on long-term contracts, its
LPG vessels operate on shorter-term charters and in the
spot market, with the attendant market-related volatility
in operating results of the latter, larger operating segment
of the company. The current slowdown in available LPG
shipments, stemming in part from delays in the startup of
production capacity, has severely depressed the
profitability of this larger segment of the company – by as
much as 65-75% in certain areas of this market. The
lower profitability for LPG shipping will very likely
translate into reduced transaction values for such tankers
(when LPG tanker transactions actually take place). This
prospective “mark-to-market” of the company’s LPG fleet
would result in the reduction in the company’s equity,
raising the possibility of the company running afoul of its
debt covenants. With this unpleasant possibility looming
on the horizon, the Fund chose to sell its holding in BW
Gas Common.
THE “ACCIDENTAL THEMIST”
The Fund’s investment approach is avowedly (some would
say stubbornly) bottom-up, with fundamental analysis and
individual security selection at its core. Nonetheless, we are
periodically asked about the themes that we are invested
in, particularly when there appears to be a concentration of
investments under a particular industry category or in a
geographic region. The Fund’s modus operandi is to invest
in individual securities based upon their standalone merits,
which would inter alia include safety of capital invested,
cheapness, and attractiveness of the company’s industry or
assets. Sometimes, because of broader economic factors or
industry-specific issues, a group of companies related by
geography or activity become potential candidates for
consideration as investments for the Fund. Periodically, the
number of such candidates in a given industry or
geography which find themselves in the portfolio is
sufficient enough that a casual observer might infer that
such a cluster of the Fund’s investments stemmed from a
broader industry or geographic theme.
Traditional thematic investing starts with the identification
of bigger picture phenomenon (economic, sectoral,
geographic, etc.) and the search for investments that fit this
over-arching belief (or beliefs) follows. Often, if a theme or
trend becomes evident at a “macro” level in this top-down
approach, there is a reasonable probability that this will
already be reflected at the security level, either in terms of
operating performance or valuations. In contrast, when the
Fund’s bottom-up approach identifies a group of such
investments, usually one at a time, typically their depressed
valuations have tended to reflect a poor near-term outlook
for the business. In this latter approach, the payoffs are
often long term and the path taken by the business is
unknown, as opposed to the theme-based approach where
the drivers of the payoff (the “theme”) are known or at least
believed to be known.
An example of how the Fund “accidentally” chanced upon
a theme is the investments made in a number of oil service
companies during the 2003-2004 period. Our initial
investment in this area began with the purchase of an
offshore oil driller in Norway. This was followed by
investments in a holding company of another driller; a
company providing undersea construction services; a
company providing design and engineering of offshore oil
drilling installations; a company that provided transport to
these installations; and another company which provided
seismic services.
In making these investments, no particular theoretical
assumption was made about the path of future oil prices,
other than the observation that oil companies had for a
number of years been relatively stingy in their spending in
the early stages of exploration and development (e.g.,
19
seismic shoots, land acquisitions, exploratory drilling, etc.),
which increased the likelihood of higher, rather than lower,
oil prices in the future. This parsimony in spending is
precisely what had hurt the profitability of a number of the
aforementioned companies, presenting us with attractive
investment opportunities. The companies themselves were
well capitalized in absolute terms, as well as relative to their
peers, which increased the probability of their survival and
ability to potentially prosper as the ranks of their peers
thinned. We had no preconceptions about the specific
source of the payoff, other than an awareness of the history
of a considerable amount of merger and acquisition activity
in various segments of this industry. Indeed, the results of
these investments were quite satisfactory, with returns from
this group of investments coming both via resource
conversion, as well as by the gradually improving demand
and pricing for their services which resulted in improved
profitability. This foray into oil service companies was a
consequence of finding a number of companies in an
industry group which were ill understood or under-
analyzed amid a depressed industry environment which
begat unpopularity and undervaluation, despite the
industry’s considerable long-term attractiveness.
One such accidental theme which is represented in the
Fund’s current portfolio is that of companies operating in
the area of Insurance and Reinsurance. These companies
have been generally tarred by their association with the
convulsing financial sector and thus deemed “dangerous” by
many investors. To be sure, the companies whose shares the
Fund holds are a heterogeneous lot, but what they do have
in common, along with their cheapness, is the absence of a
need to access capital markets to fund ongoing operational
needs, a characteristic which has served them well in these
capital-constrained times. Here too, the portfolio holdings
were added one-by-one on an opportunistic basis, starting
with the Fund’s long-term holding in Brit Insurance
Holdings PLC (“Brit”). While Brit’s conservatism in capital
utilization and underwriting generally did not win favor
with investors in more benign times, it allowed the company
to approach the current period with a good balance sheet.
Next, the Fund took advantage of the subprime fallout by
investing in the common stocks of Montpelier Re Holdings
Ltd. and Sompo Japan Insurance Inc., whose stock prices
were depressed despite the fact that their exposure to such %
_______
securities was non-existent to small. Subsequent declines in Japan 16.69
the Japanese equity market negatively impacted the stock Canada 9.90
price of Tokio Marine Holdings – which held a large Singapore 9.00
Japanese equity portfolio – resulting in the next addition to Hong Kong 6.78
this group. Further declines throughout 2008, in a variety of Germany 5.91
asset-backed securities markets, presented the opportunity Taiwan 5.57
to purchase Munich Re Common and Allianz SE United Kingdom 5.43
Australia 5.17
Common. Finally, in the third quarter of 2008, a margin France 4.35
call on an indebted Icelandic holder dislodged a large block Poland 3.79
of Sampo Oyj Common, presenting the Fund with the Belgium 3.72
opportunity to purchase it at an attractive valuation. Chile 2.22
United States 2.16
Although a casual observer may assume otherwise, the South Korea 1.95
common thread in the Fund’s investments in Insurance Bermuda 1.70
and Reinsurance companies has been the generalized New Zealand 1.66
mayhem in the capital markets and the subsequent impact Sweden 1.21
on this varied group of investment opportunities. Despite Finland 0.97
being classified under the same industry category, there are Denmark 0.71
more differences than similarities among these companies, Thailand 0.34
______
with many of their business dynamics (pricing, cyclicality Equities-total 89.23
of profits, cost structures, etc.) being determined by Cash & Other 10.77
______
idiosyncrasies of their respective domestic markets. Total 100.00%
______
As a final note, Fund Management has begun to devote Portfolio holdings are subject to change without notice.
additional resources to potential opportunities in credit Note that the table above should be viewed as an ex-post
markets, an area of increasing interest and one in which listing of where our investments reside, period. As we have
Third Avenue Management has considerable analytical noted in prior letters, there is no attempt to allocate the
experience. Areas of attraction are likely to be primarily portfolio assets among countries (or sectors) based upon an
comprised of fixed income securities for which Fund overarching macroeconomic view or index-related
Management believes the probabilities to be in favor of considerations.
the loan remaining a performing loan, though may also
include restructuring situations where Fund Thank you for your continued support. I look forward to
Management believes potential returns to be particularly writing to you again when we publish our next quarterly
attractive or where equity in a well-capitalized company report for the period ended April 30, 2009.
may be created, through the restructuring process, at Sincerely,
unusually attractive prices.
GEOGRAPHICAL DISTRIBUTION OF INVESTMENTS
At the end of January 2009, the geographical distribution
of equity securities held by the Fund was as follows: Amit Wadhwaney
Portfolio Manager,
Third Avenue International Value Fund

20
 BOARD OF TRUSTEES
Jack W. Aber Marvin Moser
David M. Barse Eric Rakowski
William E. Chapman, II Martin Shubik
Lucinda Franks Charles C. Walden
Edward J. Kaier Martin J. Whitman

OFFICERS
Martin J. Whitman — Chairman of the Board
David M. Barse — President, Chief Executive Officer
Vincent J. Dugan — Chief Financial Officer, Treasurer
Michael A. Buono — Controller
W. James Hall — General Counsel, Secretary
Joseph J. Reardon — Chief Compliance Officer

TRANSFER AGENT
PNC Global Investment Servicing
P.O. Box 9802
Providence, RI 02940
610-382-7819
800-443-1021 (toll-free)

INVESTMENT ADVISER
Third Avenue Management LLC
622 Third Avenue
New York, NY 10017

CUSTODIAN
Custodial Trust Company
101 Carnegie Center
Princeton, NJ 08540

Third Avenue Funds

622 Third Avenue
New York, NY 10017
Phone 212-888-5222
Toll Free 800-443-1021
Fax 212-888-6757
www.thirdave.com