Third Avenue Management is exploring a sale of its high-yield mutual fund, whose meltdown helped fuel a sell-off in the junk bond market in late 2015.

The New York firm tapped investment bank Houlihan Lokey to shop its Third Avenue Focused Credit Fund, which had assets of $592 million as of June 30, according to people familiar with the matter. Proceeds from a sale would go to the fund's investors, who lost the ability to withdraw money when the firm halted redemptions in December.