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This letter is not a research report or recommendation to buy or sell the securities mentioned herein. The examples herein are illustrations of ways in
which Corsair and its affiliates have examined or may examine opportunities. Corsair and its affiliates may, at any time, buy or sell any of the securities
mentioned in this letter and may change its long or short position at any time without providing any notification of such changes. It should not be
assumed that any trading activities pursued in the future will be profitable and may in fact result in losses.
April 24, 2012


Dear Limited Partner:

For the first quarter ended March 31, 2012, Corsair Capital was up an estimated 7.4% net, after all
fees and expenses. Since inception in January 1991, Corsair Capital`s compounded net annual
return is 14.6%.






Equity markets continued their positive momentum generated at the end of 2011. Emboldened by a
second round of Long Term Refinancing Operations ('LTRO) by the European Central Bank,
investors maintained a 'risk on mode during the first quarter. The LTRO lessened the short-term
credit crunch facing many European banks, allowing them to avoid being forced to sell many
assets at current market prices (i.e., at a loss). Additionally, these banks, then bought their country`s
sovereign bonds, alleviating both rising interest costs and the refinancing risks facing many
southern European countries.

Of course, the LTRO is no 'Iree lunch. It comes at the cost of both leveraging the ECB with weak
collateral and ever-increasing sovereign default risk for European banks. All the more so after
Greece completed an historic t200 billion 'voluntary debt restructuring in early
March; 'voluntary to the extent that any investor normally accepts a package of new securities
worth 25 cents on the dollar. Nevertheless, for the moment, investors can remove Greece from
their list of things to worry about.

Instead, as the second quarter begins, investors have turned their attention to Spain. Spain`s new
leaders recently proposed a 2012 budget with expenditure cuts of t27 billion in order to narrow its
forecasted deficit to 5.3% of GDP versus last year`s 8.5%. This leaves Spain with little or 'no
margin for error as their Finance Minister Luis de Guindos recently stated. Mr. de Guindos also

Unless otherwise noted, performance figures included herein (which include the reinvestment of dividends, capital gains and other earnings) are for
Corsair Capital Partners, L.P. The figures for the fund are based on an investment made as of the inception of the fund, are calculated net of the fund's
fees and expenses, are based on unaudited data, and may be subject to adjustment. Additionally, the figures for the fund are calculated using the highest
management fee per annum rate generally offered by the fund at the time a 1.00% rate through May 2002, a 1.25% rate from May 2002 through 2009,
and a 1.50% rate commencing January 2010. Although the portfolios of the other funds within the Corsair Capital "family" have been substantially similar
to Corsair Capital, the actual returns of such other funds have varied. Also, results for individual investors within a particular fund managed by Corsair
Capital Management, LLC ("Corsair") or its affiliates have varied based on, among other things, the applicable fee rate and the timing of capital
contributions and redemptions/withdrawals. For additional important disclosures regarding this letter, please see the last page of this letter.

Corsair Capital (net) S&P 500 Russell 2000
1Q12 return 7.4% 12.6% 12.4%
Annualized since inception (1991) 14.6% 9.3% 10.6%
Total return since inception (1991) 1699% 561% 743%
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This letter is not a research report or recommendation to buy or sell the securities mentioned herein. The examples herein are illustrations of ways in
which Corsair and its affiliates have examined or may examine opportunities. Corsair and its affiliates may, at any time, buy or sell any of the securities
mentioned in this letter and may change its long or short position at any time without providing any notification of such changes. It should not be
assumed that any trading activities pursued in the future will be profitable and may in fact result in losses.
added that his country possibly faces a 'lose-lose situation, where financial markets require Spain
to slash their budget deficit (in order to keep interest rates low), but these same spending cuts
might worsen the decline in an economy already suffering from 20% unemployment.

Unfortunately, almost all developed nations currently face this quandary of how to cut their budget
deficits while stimulating growth in their economies. Increasing taxes and cutting government
spending help reduce government deficits, but are neither easy to implement nor helpful to the
economy. Thus, we have instead seen a policy of quantitative easing by Central Banks around the
globe in an effort to keep interest rates low. As Federal Reserve Governor Janet Yellen put it, 'I
consider a highly accommodative policy stance to be appropriate in present circumstances.
Investors will all have to keep their fingers crossed that the Federal Reserve and its international
counterparts will likewise know when to turn off the monetary spigots before too much inflation is
unleashed.

Portfolio Update

We were pleased to participate in the market`s strong rally during the quarter. Some of the biggest
contributors to our performance are detailed below:

Neo Material Technologies ('NEM`), a company we described in depth in the appendix to our Q4
2010 letter (and also mentioned in last quarter`s letter), was the biggest contributor this quarter
after Molycorp ('MCP) announced its intention to purchase the company for $8.05 in cash and
.122 shares of MCP common stock (for a total purchase price of approximately $11.45/share).
While we are pleased to see our thesis of value at NEM borne out, we believe that MCP is getting a
bargain. MCP estimates $100 million of low-hanging synergies on top of the $1.00+/share of core
NEM earnings, $1.00/share in net NEM cash and the potential of the Pitinga mining operation. We
believe MCP desperately needs NEM`s rare earth processing capabilities/customer relationships
and anticipate the merger will receive appropriate approvals in order to close. However, with a
modest break-up fee, we also would not be surprised if another bidder emerges. The stock ended
the quarter at $11.22.

LyondellBasell`s ('LYB) stock continued to perform very well in the first quarter. Though the
company reported a weak Q4 as expected, the market anticipates record-low gas prices will
continue to suppress ethane prices, one of LYB`s main input costs, thereby supporting high
ethylene margins. If current ethane prices are sustainable, the industry could enter a super-cycle`
where LYB would show earnings previously not thought possible. The company also took
advantage of the current strong credit markets and refinanced $3 billion of debt, benefitting by both
extending maturities and lowering interest payments. LYB ended the quarter at $43.65.




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This letter is not a research report or recommendation to buy or sell the securities mentioned herein. The examples herein are illustrations of ways in
which Corsair and its affiliates have examined or may examine opportunities. Corsair and its affiliates may, at any time, buy or sell any of the securities
mentioned in this letter and may change its long or short position at any time without providing any notification of such changes. It should not be
assumed that any trading activities pursued in the future will be profitable and may in fact result in losses.
Republic Airways ('RJET) got off to a strong start in 2012 after reporting Q4 earnings of
$0.34/share that easily beat consensus estimates of $0.09/share. By early February, RJET traded as
high as $6.33 after entering the year at $3.50. The impressive Q4 results underscored both the
consistent earnings strength at Republic and the successful restructuring of its Frontier subsidiary
despite $35 million of increased jet fuel costs in the quarter. Management now has plans to achieve
Ultra Low Cost Carrier ("ULCC") status for Frontier by cutting costs further which should result in
a higher valuation multiple. RJET continues to operate Frontier as a separate entity and has
appointed an independent management team in preparation for the expected sale/divestiture. We
believe Republic excluding Frontier will generate cash earnings of $1.25/share in 2012 with upside
the following year. The stock ended the quarter at $4.94.

Shaw Industries ('SHAW highlighted in the appendix to our Q3 2011 letter) performed well this
quarter after 1) two of its main customers received the final requisite Nuclear Regulatory
Commission licensing to construct two new nuclear power plants and 2) the EPA`s increased
environmental standards drove power plant maintenance contract wins. The company also reported
a strong fiscal Q2 and the upcoming divestiture of the Energy and Chemicals division in the next
few months should create additional shareholder value. We estimate that SHAW could earn
$3.00/share in FY 2013, which would increase its net cash position to over $17.00/share. SHAW
ended the quarter at $31.71.

TNS, Inc. ('TNS), another of our core holdings (and described in the appendix to our Q2 2011
letter), took advantage of the low-interest rate environment by refinancing its credit facility and
pushing out maturities; we estimate the company will save $0.20/share in lower interest costs. The
company also announced strong 2011 earnings of $2.28/share - above guidance and consensus -
and introduced bullish 2012 guidance of $2.39-$2.55/share which includes a loss of $0.16-
$0.20/share from its Cequint subsidiary. The company estimates 2012 organic growth of 4%-6%,
driving 7%-14% adjusted EPS growth even as it continues to invest in new products. TNS ended
the quarter at $21.73.

Organizational Update

We are pleased to announce that as of March 31, 2012 Corsair Capital Management, LLC is now
officially registered with the Securities and Exchange Commission as a registered investment
advisor. As most of you are aware, we have been preparing for registration for quite some time and
expect little change to our daily routines. We look forward to continuing to work with our outside
auditors, attorneys, administrators and compliance consultants to provide both ourselves and our
partners with best-of-breed investment management practices.



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This letter is not a research report or recommendation to buy or sell the securities mentioned herein. The examples herein are illustrations of ways in
which Corsair and its affiliates have examined or may examine opportunities. Corsair and its affiliates may, at any time, buy or sell any of the securities
mentioned in this letter and may change its long or short position at any time without providing any notification of such changes. It should not be
assumed that any trading activities pursued in the future will be profitable and may in fact result in losses.
Thank you for your continued support and confidence. See the attached Appendix for a write-up
of a current core investment. Please feel free to call us with any questions you may have at 212-
389-8240.

Sincerely,



Corsair Capital Management, LLC


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This letter is not a research report or recommendation to buy or sell the securities mentioned herein. The examples herein are illustrations of ways in
which Corsair and its affiliates have examined or may examine opportunities. Corsair and its affiliates may, at any time, buy or sell any of the securities
mentioned in this letter and may change its long or short position at any time without providing any notification of such changes. It should not be
assumed that any trading activities pursued in the future will be profitable and may in fact result in losses.
Appendix SunCoke Energy 6;& $14)

Thesis Overview: SunCoke Energy (SXC) was spun off from Sunoco in 2011 and has since stayed
under the radar due to what we believe is a misperception of the FRPSDQ\V business model. While
analysts have grouped SXC with steel and coal companies, 6;&V long term take-or-pay contracts
with cost pass-through provisions protect the company from market volatility (akin to those of a
toll collector). Unlike steel companies whose utilization rates dropped to 50% in 2009 and are
currently grappling with widespread oversupply, SXC has continued producing per its agreements
and growing its manufacturing capabilities. We believe SXC offers both steelmakers and equity
investors a compelling and valuable proposition. SXC has modest debt, generates a tremendous
amount of cash, and management has invested in SXC since the spin. At 10x 2012 run rate
EBITDA less Maintenance CapEx (their Middletown, OH facility comes on line mid-2012), we
derive a target price over $25.

Value to Customers: For steelmakers, SXC provides a steady supply of coke used in blast
furnaces to convert iron ore to iron. Its leading hardware and process technologies offer low
emissions, operational flexibility, and low electricity consumption, and it remains the only
company that has produced a new Greenfield coke plant in the United States over the past 25 years.
SXC builds coke-making facilities near its FXVWRPHUV steel operations in which it produces higher
yielding coke under 20 year take-or-pay contracts at a lower cost than that available in the
merchant market.

A majority of existing coke producers use utility by-product ovens, which generate higher levels of
toxic gas, liquid and solid waste materials. 6;&V lower emission heat recovery ovens even
produce electricity it sells to steelmakers.

Steelmakers also have the option of using natural gas in their blast furnaces; SXC management
expects steel producers to continue to blend natural gas in their furnaces to reduce expenses when
coal prices rise. However, natural gas cannot supplant coke unless the steelmaker constructs an
entirely new facility designed for natural gas. Industry commentary suggests many steelmakers are
unwilling to risk sufficient capital to build a Greenfield plant and recognize 6;&V coke is both
superior and lower cost than imported or self-produced coke.

Value to I nvestors: SXC offers investors exposure to highly-structured contracts that provide
recurring cash flows and significant incremental, low-risk earnings growth as new plants come
online. 6;&V business model mitigates downside risk in an uncertain macro environment. Take-
or-pay contracts provide cash flow security with targeted volume ranges and earnings levels set at
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This letter is not a research report or recommendation to buy or sell the securities mentioned herein. The examples herein are illustrations of ways in
which Corsair and its affiliates have examined or may examine opportunities. Corsair and its affiliates may, at any time, buy or sell any of the securities
mentioned in this letter and may change its long or short position at any time without providing any notification of such changes. It should not be
assumed that any trading activities pursued in the future will be profitable and may in fact result in losses.
contract inception and seek to pass coal, transportation, and certain operating expenses directly
onto customers. The company also retains additional upside given its ownership of coal assets.
Contracts allow SXC to pass-through coal costs, but if SXC can acquire its own coal more
cheaply than that available in the open market, it profits the difference. We do not view SXC as a
coal company given coal will only contribute ~10% of EBITDA, though we do believe earnings
may receive a boost from improved coal operations in the coming years.

Growth Opportunity: We expect strong growth in 2012 due primarily to their bringing on the
new Middletown Ohio facility and the absence of start-up and other one-time costs incurred in
2011. For 2013, we expect a full year of Middletown operations to drive EBITDA growth and
thereafter see further earnings upside from 1) a 1.1 million ton domestic multi-customer plant
coming online in 2015, 2) replacement of retiring aging coke plants in the US, and 3)
international coke-making facilities.

SXC plans to bring online a new multi-customer facility in 2015 that will be twice the size of the
latest plant, Middletown, with lower capital costs per ton. Improvements in technology and
benefits of scale should drive EBITDA margins well above the $50/ton average for domestic coke
plants and add at least $60 million in recurring EBITDA.

SXC should benefit from the eventual retirement of much of North America`s existing coke-
making capacity. While plants in Brazil, Russia, Poland, India, and other developing countries are
~15-20 years old, the average age of coke plants in the US, Japan, and Canada is between 30 and
40 years. As plants are decommissioned, steelmakers will be forced to either increase their
dependence on imported materials or contract/construct new domestic capacity. Over the last
several years, steel producers have preferred to outsource the supply of coke to SXC via long-
term agreements, and since 2005, SXC has constructed and contracted ~2.3 million tons of annual
production. SXC expects 3 million tons of North America coal-making capacity will be in need of
replacement; US Steel will likely undertake production for 1.5 million of capacity, leaving 1.5
million to be filled by imports or SXC capacity.

Finally, SXC can expand its international footprint with little capital risk. For example, according
to management, the Indian market is structurally short both coke and power; SXC supplies both at
highly competitive prices, making India a natural fit for future SXC growth.

Risks: The primary investment risks include failure of a major customer (SXC currently has only
three primary customers, MT, AKS, and X, with MT accounting for 70% of sales), a high
adoption rate for coke substitutes that would lower the demand for metallurgical coke, prolonged
downturn in North American steel production, and operational issues. Longer term, we do expect


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steelmakers to continue using increasing amounts of natural gas in their blast furnaces, though
even aggressive expectations do not jeopardize SXC earnings in a material way over the
coming decades.

Valuation: We expect the company to generate a significant amount of cash this year (at least
$200 million before growth investments) and to use that cash in a shareholder-friendly manner.
Peer companies which we believe have earnings characteristics similar to those of SXC such as
Air Products and Praxair trade between 13 and 18x EBITDA less Maintenance CapEx. Over
time, investors have rewarded these companies for characteristics that closely mirror those of
SXC: long term contracted high margin earnings with growth potential.

Based on $300 million of EBITDA (2012 guidance plus Middletown for a full year of
operations) less Maintenance CapEx of $60 million valued at 10x yields a target price of $27,
presenting significant upside. On an EPS basis, SXC should report $1.50 this year and $2.00 in
2013. Investors get IRU IUHH the 2015 facility and any international expansion. Finally, the
company has announced it is considering converting the coke operations to an MLP structure,
which would provide even further upside.


Low Base High Normalized
Segment EBITDA
Coke $240 $255 $270 $300
Coal 40 40 40 60
Corporate (30) (30) (30) (20)
Total $250 $265 $280 $340
Maint. CapEx (50) (50) (50) (50)
EBITDA - CapEx $200 $215 $230 $290
Fair Multiple 10.0 x 10.0 x 10.0 x 10.0 x
EV $2,000 $2,150 $2,300 $2,900
Net Debt 587 587 587 587
Equity Value $1,413 $1,563 $1,713 $2,313
Shares Outstanding 70 70 70 70
Per Share $20.19 $22.33 $24.47 $33.04
Upside / Downside 44.2% 59.5% 74.8% 136.0%
Current Price $14.00
Market Cap $980
Net Debt 587
EV $1,567
2012
This letter is not a research report or recommendation to buy or sell the securities mentioned herein. The examples herein are illustrations of ways in
which Corsair and its affiliates have examined or may examine opportunities. Corsair and its affiliates may, at any time, buy or sell any of the securities
mentioned in this letter and may change its long or short position at any time without providing any notification of such changes. It should not be
assumed that any trading activities pursued in the future will be profitable and may in fact result in losses.
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This letter is not a research report or recommendation to buy or sell the securities mentioned herein. The examples herein are illustrations of ways in
which Corsair and its affiliates have examined or may examine opportunities. Corsair and its affiliates may, at any time, buy or sell any of the securities
mentioned in this letter and may change its long or short position at any time without providing any notification of such changes. It should not be
assumed that any trading activities pursued in the future will be profitable and may in fact result in losses.
I MPORTANT DI SCLOSURES

An investment in any Corsair fund is speculative and involves a high degree of risk. Past
performance is not necessarily indicative of future results. There can be no assurances that any
Corsair fund will continue to have a similar return on invested capital because, among other
reasons, there may be differences in economic and market conditions, regulatory and political
climate, portfolio size, investment opportunities, expenses and structure.

References to benchmarks are for illustrative purposes only. Comparisons to benchmarks have
limitations because characteristics of such benchmarks, such as level of volatility and position
concentration, among other things, may differ from those of the applicable Corsair fund. The
Corsair funds do not attempt to track a benchmark.

The information in this letter is as of the date set forth on the cover page hereto and is subject to
change without notice. The delivery of this letter at any time does not imply that the information
or opinions contained herein are correct at any time subsequent to the date set forth on the cover
page hereto.

Any forward-looking statements included in this letter represent the subjective views of the
portfolio managers of Corsair, including the future performance of the market generally and
portfolio companies specifically, based on assumptions that may or may not prove to be correct.
There can be no assurance that these views are accurate or will be realized, and nothing
contained here is, or should be relied on as, a promise as to the future performance or condition
of any Corsair fund, any portfolio company or the market generally. Industry experts and the
portfolio companies themselves may disagree with these views and/or assumptions.

Certain information contained herein has been obtained by Corsair from third parties. While
Corsair believes that such sources are reliable, it cannot guarantee the accuracy of any such
information and does not represent that such information is accurate or complete.