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Value investors never die. They just open new investment vehicles.

At the age of 87, high-profile value investor Marty Whitman says he plans to hand over management of the $3.2 billion Third Avenue Value Fund to longtime co-manager and protégé Ian Lapey on March 1.

Mr. Whitman will remain as chairman of Third Avenue Management, which he founded, and continue to play an active role in the firm’s research process.

He said in an interview that he will also manage a private, concentrated value fund for accredited investors, funded by a portion of his holdings in Third Avenue Value Fund, which was launched in 1990.

Mr. Lapey, 45, who joined Third Avenue Management in 2001 and was appointed co-manager to the value fund in July 2009, was previously an stock-research analyst with Credit Suisse First Boston and Salomon Brothers. Little will change at Third Avenue Value Fund, he says, though it is likely to become more diversified.

“Over the past couple of years, it has become very concentrated,” Mr. Lapey says. “We have a big inventory of new ideas.” The fund now holds 42 positions, and the top 10 account for about 68% of its assets.

Mr. Whitman is best known for digging through stocks trading at anywhere from 25% to 60% of their net-asset values, seeking out those with strong balance sheets. He has sought out companies whose disclosures were comprehensive and in plain English, and he refused to invest in any company that isn’t audited by one of the major accounting firms.

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