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Third Avenue Value FundThird Avenue Small-Cap Value FundThird Avenue Real Estate Value FundThird Avenue International Value Fund

LETTERS TO OUR SHAREHOLDERS

FirstQuarter Commentary

January 31, 2009

This publication does not constitute an offer or solicitation of any transaction in anysecurities. Any recommendation contained herein may not be suitable for all investors.Information contained in this publication has been obtained from sources we believe to bereliable, but cannot be guaranteed.The information in these portfolio manager letters represents the opinions of the individualportfolio 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 andmay differ from those of other portfolio managers or of the firm as a whole. Also, pleasenote that any discussion of the Funds’ holdings, the Funds’ performance, and the portfoliomanagers’ views are as ofJanuary 31, 2009, and are subject to change without notice.Third Avenue Funds are offered by prospectus only. Prospectuses contain more completeinformation on advisory fees, distribution charges, and other expenses and should be readcarefully before investing or sending money. Please read the prospectus and carefullyconsider investment objectives, risks, charges and expenses before you send money. Pastperformance is no guarantee of future results. Investment return and principal value willfluctuate so that an investor’s shares, when redeemed, may be worth more or less thanoriginal 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 ourprospectus. Current performance results may be lower or higher than performance numbersquoted in certain letters to shareholders.M.J. Whitman LLC, Distributor. Date of first useFebruary 17, 2009.

Dear Fellow Shareholders: At January 31, 2009, the unaudited net asset valueattributed to the 138,141,731 shares outstanding of theThird Avenue Value Fund (“TAVF”, “Third Avenue”, orthe “Fund”) was $31.08 per share. This compares with anaudited net asset value of $34.97 per share at October 31,2008; and an unaudited net asset value of $56.85 per shareat January 31, 2008, both adjusted for a subsequentdistribution to shareholders. At February 13, 2009, theunaudited net asset value was $30.52per share.

QUARTERLY ACTIVITY

Principal activities during the quarter were as follows:

Principal AmountNew Position Acquired

$78,750,000Nortel Networks Senior Unsecured Debt(“Nortel Seniors”)

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Principal Amount orNumber of SharesPositions Increased

$66,104,000Forest City Parent Company SeniorUnsecured Debentures(“Forest City Seniors”)$10,367,000GMAC 7

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%Senior Unsecured Debtdue 1/19/2010 (“GMAC7

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%”)$5,000,000MBIA Insurance Corp.14% SurplusNotes (“MBIA Surplus Notes”)2,199,300 sharesForest City Enterprises Class ACommon Stock(“Forest City Common”)54,500 sharesPOSCOADRs(“POSCOCommon”)

Positions Decreased

$12,000,000GMAC 7

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% Senior Unsecured DebtDue 2011 (“GMAC7

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%”)1,939,812 sharesSt. Joe Common Stock(“St. Joe Common”)5,669,417 sharesAVX Corp. Common Stock(“AVX Common”)

Positions Eliminated

594,300 sharesAlamo Group Common Stock(“Alamo Common”)36,648 sharesHomefed Corp. Common Stock(“Homefed Common”)8,151,000 sharesMitsubishi Estate Common Stock(“Mitsubishi Common”)7,970,000 sharesMitsui Fudosan Common Stock(“Mitsui Common”)5,148,000 sharesPower Corp. of Canada Common Stock(Power Corp. Common”)

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* 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%; HendersonLand 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%; andNabors Industries, Ltd., 2.83%.

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