The Robinson-Trautman (RT) spacetime is the simplest solution of General
Relativity (GR) describing a compact source surrounded by gravitational waves. As an
initial value problem, the RT spacetime evolution is a well-posed problem. The pertinent
dynamical equations are equivalent to the so-called Calabi flow, and regular initial data
evolve smoothly towards a final state corresponding to a remnant Schwarzschild
black-hole. Extensions of RT spacetimes for higher dimensions (D > 4) were recently
proposed, and the essence of the RT evolution is unchanged: regular initial data evolve
towards a final higher-dimensional Schwarzschild black-hole. The situation for D=3 is
quite different due to some peculiarities of GR. We will present a D=3 RT flow mimicking
the essential properties of the Calabi flow. In particular, regular initial data evolve
towards a final remnant BTZ black hole, and any possible asymmetry in the initial data is
expelled as a radiation fluid.