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, 2012Dear Limited Partner:For the first quarter ended March 31, 2012, Corsair Capital was up an estimated 7.4% net, after allfees and expenses. Since inception in January 1991, Corsair
compounded net annualreturn is 14.6%.Equity markets continued their positive momentum generated at the end of 2011. Emboldened by asecond round of Long Term Refinancing Operations
by the European Central Bank,investors maintained a
mode during the first quarter. The LTRO lessened the short-termcredit crunch facing many European banks, allowing them to avoid being forced to sell manyassets at current market prices (i.e., at a loss). Additionally, these banks, then bought their
sovereign bonds, alleviating both rising interest costs and the refinancing risks facing manysouthern European countries.Of course, the LTRO is no
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
debt restructuring in earlyMarch;
to the extent that any investor normally accepts a package of new securitiesworth 25 cents on the dollar. Nevertheless, for the moment, investors can remove Greece fromtheir list of things to worry about.Instead, as the second quarter begins, investors have turned their attention to Spain.
newleaders recently proposed a 2012 budget with expenditure cuts of
27 billion in order to narrow itsforecasted deficit to 5.3% of GDP versus last
8.5%. This leaves Spain with little or
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 ca
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,
e 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
he 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 500Russell 20001Q12 return7.4%12.6%12.4%Annualized since inception (1991)14.6%9.3%10.6%Total return since inception (1991)1699%561%743%