Massachusetts' Galvin to probe 'unprecedented decision' by Third Avenue fund

Massachusetts said it's investigating the closure of the Third Avenue Focused Credit Fund. The Massachusetts Securities Division sent out a subpoena today to probe the fund closure and the liquidation plan, according to a statement by Secretary of the Commonwealth William F. Galvin on Monday. “My office is opening this investigation to determine when and how this decision was made and to determine the extent of Massachusetts investors who have been impacted by this unprecedented decision on the part of fund management,” Mr. Galvin said in the statement. Third Avenue officials were not immediately available to comment. (More: Will Third Avenue's woes spread to bond ETFs?) “We had money in that Third Avenue fund, but sold out of it this summer after it got to $3.5 billion and they wouldn't close it to new investors,” said Bradley Alford, chief investment officer at Alpha Capital Management. “I don't know how they can just stop redemptions, and I'm concerned about the message it will send to retail investors,” he said. “This is disastrous in the credit world, and retail investors will be panicking.” Jeff Benjamin contributed reporting to this story.