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Corsair Capital Management, LLC

350 Madison Avenue, 9
th
Floor
New York, NY 10017
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 Capital Management, LLC and its affiliates have examined or may examine opportunities. Corsair Capital Management, LLC 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.




July 15, 2011


Dear Limited Partner:

For the second quarter ended June 30, 2011, Corsair Capital was up an estimated 0.2%* net, after
all fees and expenses, bringing our 2011 performance to 6.2%*. Since inception in January
1991. Corsair Capital`s compounded net annual return is 15.3%.

Corsair Capital (net) S&P 500 Russell 2000
2Q11 return 0.2% 0.1% -1.6%
YTD return 6.2% 6.0% 6.2%
Annualized since inception (1991) 15.3% 9.2% 10.9%
Total return since inception (1991) 1749% 510% 731%


* Returns are based on investments made at fund inception and using the highest possible fee schedule. Returns for investors in
these or any of the Corsair funds are most accurately provided in the monthly capital statements.

As we noted in our last quarterly letter, the market started 2011 on firm footing despite risks
posed by political instability, higher commodity prices, and major natural disasters. Easier credit
and financial conditions, continued progress in private sector deleveraging, improving labor
market conditions, and other signs of economic stability pushed equity indices higher. However,
markets reversed course in May as economic indicators pointed to slower global growth.

Supply-chain disruptions related to the Japanese earthquake and temporary spikes in gasoline
and commodity prices experienced in Q1 likely had a larger impact on GDP than investors
initially anticipated. Fortunately, recent data suggest that the temporary Japan-related disruptions
explain a large portion of the recent slowdown in U.S. industrial activity. Vehicle production has
since ramped up sharply, the June ISM manufacturing index surprised to the upside, and
commodity prices have returned to manageable levels that provide consumers breathing room to
spend or save. Despite these improvements, slow GDP growth through the first half of the year
has stymied gains in employment.

Amid this slowdown, U.S. and Eurozone solvency concerns continue to weigh on markets.
Deficit reduction negotiations in the U.S. have stalled, and the market is still waiting for
meaningful reform to our fiscal policies. Along similar lines, European policymakers continue to
debate various means of reducing Greece`s debt burden while minimizing potential contagion
fears. In addition, the market has begun to Iocus on Italy`s deteriorating Iinancials, and spreads
on periphery countries` sovereign debt have moved meaningfully higher. These spreads will
likely remain high unless greater clarity on support packages convinces the market Eurozone
governments have constructed a true solution.
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This letter brought to you via MarketFolly.com
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 Capital Management, LLC and its affiliates have examined or may examine opportunities. Corsair Capital Management, LLC 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.

As the global recovery progresses (albeit slowly), the path is proving to be more uneven than
expected across industries and geographies. For instance, while interest rates in the U.S. have
declined to historic lows, China and other countries have raised rates multiple times to combat
inflation. There seems to be a delicate balance worldwide between stimulating economic growth
and keeping prices of basic necessities within an affordable range. Even Chairman Bernanke
admits. 'It`s not clear we can get substantial improvements in payrolls without some additional
inIlation risk.¨ We believe this uncertainty only increases general investor skittishness and
market volatility.

A number of our core names positively contributed to the portfolio during the quarter, offsetting
weaker performance posted by some cyclical holdings. We remain confident our holdings can
outperform the market through the economic cycle. So long as capital markets remain open, we
remain well positioned to take advantage of opportunities that arise from companies going
through change and transition.

Portfolio Updates

Innophos ('IPHS¨), the thesis for which we laid out in the appendix of our Q3 2010 letter, rallied
this quarter after posting Q1 adjusted EPS of $1.17 (reported EPS of $1.08), ahead of consensus
expectations of $1.00. Higher product pricing and improving product mix in Mexico contributed
to the company`s strong perIormance. We continue to expect IPHS will earn approximately
$5.00 of adjusted EPS in 2012 and surpass current market expectations. The stock is trading
roughly 10x our 2012 EPS estimate, and we believe the company deserves a 15x multiple given
the quality of the business model and strength of the balance sheet. The stock ended the quarter
at $48.80.

We mentioned in our last letter Expedia ('EXPE¨) had sold off in Q1 following weather related
travel disruptions, negative FX impacts, and a growing perception of competitive risk in the
online travel industry. Once these pressures abated in Q2, EXPE announced its intention to
separate into two publicly traded companies, whereby TripAdvisor, which offers higher growth
potential and higher margin services would become an independent entity and Expedia would
continue operating as the world`s largest online travel agency. The company also recently
resumed its share buyback program, and EXPE rallied to end the quarter at $28.99.

Maiden Holdings ('MHLD¨). a specialty reinsurance company we have also highlighted in past
letters, posted strong gains as management continued to execute on its plan to deliver stable
results to shareholders. MHLD`s newly acquired international operations proved additive to EPS,
and MHLD overall generated solid underwriting returns. In addition to strong operational
performance, MHLD completed an accretive financing transaction by retiring their expensive
trust preferred securities. The company currently has a book value of $10.65/share and is
expected to earn $1.30 for 2012. MHLD ended the quarter at $9.10.

KAR Auction Services ('KAR¨) positively contributed to the portfolio after reporting strong Q1
results and completing a debt refinancing to replace both its existing revolver and senior notes.
On our estimates, the stock has traded at an undeserved discount to its peers, and we believe its
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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 Capital Management, LLC and its affiliates have examined or may examine opportunities. Corsair Capital Management, LLC 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.

earnings multiple will expand as market participants recognize the company`s very strong Iree
cash flow generation. KAR faces just one main competitor in each of its two operating segments,
and this duopolistic structure should enable KAR to maintain and expand margins. We believe
KAR can earn towards $1.50 of adjusted EPS by 2012. The stock closed the quarter at $18.91.
Pace Oil & Gas ('PCE¨). which was formed in 2010 through the merger of Midnight Oil
Exploration and the upstream assets of Provident Energy, ended Q2 down in sympathy with most
small cap energy peers. PCE trades at a steep discount to its NAV of approximately $15.00,
despite its transition to an oil-focused company from a gas-focused one. The company's current
low valuation gives little credit to its growing oil production, abundant drilling opportunities, and
potential long-term benefit from a rebound in natural gas prices. While we continue to believe
the spread between PCE`s NAV and stock price will narrow over time, the company has
encountered higher amounts of water than expected at its Haro Pekisko asset. We have
conservatively excluded this resource from our NAV estimate despite its huge resource potential.
PCE recently announced plans to repurchase up to 5% of its shares to take advantage of its
current market valuation. The stock closed the quarter at $7.65.
We continue to be optimistic about the opportunity set in front of us. As we have described in
recent letters, the tumultuous activity of the last couple of years is resulting in an increase in
interesting corporate strategic activity.

Thank you for your continued support and confidence. The attached Appendix is a write-up of a
recent investment. Please feel free to call us with any questions you may have at (212) 389-
8240.

Sincerely,

Corsair Capital Management
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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 Capital Management, LLC and its affiliates have examined or may examine opportunities. Corsair Capital Management, LLC 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 ± TNS I nc. ³TNS´± $15.85)
TNS, an international communications company, supplies many leading organizations in the
global payments and financial industries with networking, integrated data and voice services.
TNS also provides extensive telecommunications network solutions to service providers. Below
is a brief overview oI the company`s reporting segments. We think the stock is undervalued
because management disenfranchised investors after missing guidance in 2010, and the company
is incurring startup losses in a recently acquired new product line.
Point of Sale - TNS provides data transport to/from payment processors from/to endpoints like
credit card machines etc. The US side of this business has been challenged recently, but the rest
of world (ROW) is growing. Management expects this to grow 1-3% with much of the growth
coming from ROW. The US portion of this segment is facing strong headwinds from a new
competitor and from potential legislation to lower debit fees.
Financial services - TNS provides direct data/voice connections to/from financial institutions and
their clients. This business was a great growth engine until 2008 but has since declined. TNS
now believes this segment is again positioned to achieve 8-10% growth with much of that
coming from the international side.
Telecommunications services - TNS provides network services primarily with their SS7 offering,
registry, information/ID (caller ID database) and roam/clearing services. Some of these segments
will see growth (roaming), others will decline, but overall management expects this segment to
grow 4-6% top-line over the long term.
Acquired by TNS in late 2010 for $50mm, Cequint provides software technology to deliver
caller ID to mobile phones and has two core products, CityID and NameID. CityID provides city
and state information to the mobile device, while NameID provides the name of person calling.
AT&T has already launched CityID for select phones, and T-Mobile features NameID on its
website and plans to offer the service for $3.99/month. We estimate that TNS gets ~40% of the
economics with approximately 80% gross margins in line with software peers. Over the longer
term, if we assume 10% of US mobile customers pick up NameID and pricing is reduced to
$0.99/month, this could add ~$2.00/share of EPS (indeed, this feature may well be bundled as
part of a carrier's standard monthly services). It is important to note that a rollout could take a
few years as the technology will only be rolled out on new devices, but the upside potential here
is quite large.
We believe shares of TNS are undervalued and will begin to appreciate as the company executes
on its plan and certain catalysts occur over the next few quarters. The company has given
guidance for calendar 2011 EPS of $2.10, and we believe this is achievable. However, embedded
in this guidance is a $0.10/share loss related to Cequint. Excluding this expense, TNS core
adjusted earnings of $2.20 implies the stock is trading at approximately 7.5x 2011 EPS. If
Cequint contributes to earnings in 2012 as management expects, we believe the company can
earn $2.50+ and easily trade at a 12-15x multiple.
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MarketFolly.com - Your Source For Hedge Fund Tracking
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 Capital Management, LLC and its affiliates have examined or may examine opportunities. Corsair Capital Management, LLC 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.

While tracking communications businesses such as TNS often proves difficult, we believe the
problems impacting previous quarters are mostly under control. Our research and discussions
with TNS management suggest the company can return to steady growth. Given the company`s
strong free cash flow generation, earnings stability, attractive operating leverage and low
maintenance capex, we think the stock is worth at least 10x this year`s earnings, which translates
to an implied $22.00 stock price excluding the value of Cequint.
The balance sheet has ~$330m of net debt or under 2.5x net debt/EBITDA. The company has run
at higher debt levels in the past, and we believe TNS can comfortably handle as much as 3.5x.
TNS repurchased $22m of stock in 2010 and expects to repurchase another $30mm in 2011. The
company may also consider paying out a one-time special dividend which it has done in the past.
Valuation summary:
2011 EPS Guidance Midpoint $2.10
Cequint Adjustment 0.10
Core Normalized Earnings Power $2.20

Price / Earnings Multiple 10.0 x
Fair Value $22.00
Potential Cequint Value $5.00 - $20.00
Total TNS Value $27.00 - $42.00

Current Stock Price $15.85
Potential Return 70% - 165%



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As the global recovery progresses (albeit slowly). the stock has traded at an undeserved discount to its peers.08).80.65/share and is expected to earn $1. positively contributed to the portfolio after reporting strong Q1 results and completing a debt refinancing to replace both its existing revolver and senior notes. Portfolio Updates m ar ke tf ). LLC and its affiliates may.S. posted strong gains as management continued to execute on its plan to deliver stable proved additive to EPS. whereby TripAdvisor. and EXPE rallied to end the quarter at $28. have declined to historic lows. The company also recently resumed its share buyback program. China and other countries have raised rates multiple times to combat inflation. The company currently has a book value of $10. In addition to strong operational performance. and we believe its This letter is not a research report or recommendation to buy or sell the securities mentioned herein. We continue to expect IPHS will earn approximately $5.00. Higher product pricing and improving product mix in Mexico contributed to the company . and we believe the company deserves a 15x multiple given the quality of the business model and strength of the balance sheet. and a growing perception of competitive risk in the online travel industry. MHLD completed an accretive financing transaction by retiring their expensive trust preferred securities. the path is proving to be more uneven than expected across industries and geographies. Once these pressures abated in Q2. The examples herein are illustrations of ways in which Corsair Capital Management. LLC and its affiliates have examined or may examine opportunities. rallied this quarter after posting Q1 adjusted EPS of $1. Maiden Holdings a specialty reinsurance company we have also highlighted in past letters. The stock ended the quarter at $48. at any time. had sold off in Q1 following weather related travel disruptions.30 for 2012. negative FX impacts. we remain well positioned to take advantage of opportunities that arise from companies going through change and transition. ol ly general investor skittishness and . which offers higher growth potential and higher margin services would become an independent entity and Expedia would . So long as capital markets remain open. the thesis for which we laid out in the appendix of our Q3 2010 letter.10. Corsair Capital Management. MHLD ended the quarter at $9. and MHLD overall generated solid underwriting returns.17 (reported EPS of $1. Even Chairman Bernanke market volatility. 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. The stock is trading roughly 10x our 2012 EPS estimate. It should not be assumed that any trading activities pursued in the future will be profitable and may in fact result in losses. We remain confident our holdings can outperform the market through the economic cycle.00 of adjusted EPS in 2012 and surpass current market expectations. ahead of consensus expectations of $1. A number of our core names positively contributed to the portfolio during the quarter. while interest rates in the U. On our estimates. EXPE announced its intention to separate into two publicly traded companies.99. offsetting weaker performance posted by some cyclical holdings. For instance. There seems to be a delicate balance worldwide between stimulating economic growth and keeping prices of basic necessities within an affordable range.

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. abundant drilling opportunities. and this duopolistic structure should enable KAR to maintain and expand margins. KAR faces just one main competitor in each of its two operating segments. The stock closed the quarter at $18. the company has encountered higher amounts of water than expected at its Haro Pekisko asset. at any time. despite its transition to an oil-focused company from a gas-focused one. Corsair Capital Management. Please feel free to call us with any questions you may have at (212) 3898240.50 of adjusted EPS by 2012. the tumultuous activity of the last couple of years is resulting in an increase in interesting corporate strategic activity.00. The attached Appendix is a write-up of a recent investment. LLC and its affiliates have examined or may examine opportunities. PCE recently announced plans to repurchase up to 5% of its shares to take advantage of its current market valuation. ol ly . m ar ke tf Sincerely. ended Q2 down in sympathy with most small cap energy peers. The stock closed the quarter at $7. As we have described in recent letters. We have conservatively excluded this resource from our NAV estimate despite its huge resource potential. Corsair Capital Management Thank you for your continued support and confidence. While we continue to believe the will narrow over time. The company's current low valuation gives little credit to its growing oil production. We believe KAR can earn towards $1. This letter is not a research report or recommendation to buy or sell the securities mentioned herein. LLC and its affiliates may.91.earnings multiple will expand as market participants recognize cash flow generation.65. It should not be assumed that any trading activities pursued in the future will be profitable and may in fact result in losses. We continue to be optimistic about the opportunity set in front of us. Pace Oil & Gas which was formed in 2010 through the merger of Midnight Oil Exploration and the upstream assets of Provident Energy. and potential long-term benefit from a rebound in natural gas prices. PCE trades at a steep discount to its NAV of approximately $15. The examples herein are illustrations of ways in which Corsair Capital Management.

integrated data and voice services.10/share loss related to Cequint. LLC and its affiliates may.10. CityID provides city and state information to the mobile device. while NameID provides the name of person calling.TNS provides network services primarily with their SS7 offering. embedded in this guidance is a $0.50+ and easily trade at a 12-15x multiple. Over the longer term. The company has given guidance for calendar 2011 EPS of $2. supplies many leading organizations in the global payments and financial industries with networking. TNS now believes this segment is again positioned to achieve 8-10% growth with much of that coming from the international side. information/ID (caller ID database) and roam/clearing services. at any time. Acquired by TNS in late 2010 for $50mm. but overall management expects this segment to grow 4-6% top-line over the long term. this could add ~$2. Management expects this to grow 1-3% with much of the growth coming from ROW.99/month. registry.MarketFolly. AT&T has already launched CityID for select phones. This business was a great growth engine until 2008 but has since declined. LLC and its affiliates have examined or may examine opportunities. ol ly TNS. . TNS also provides extensive telecommunications network solutions to service providers.00/share of EPS (indeed. The US portion of this segment is facing strong headwinds from a new competitor and from potential legislation to lower debit fees.5x 2011 EPS. Excluding this expense. The examples herein are illustrations of ways in which Corsair Capital Management. and we believe this is achievable. Cequint provides software technology to deliver caller ID to mobile phones and has two core products. We believe shares of TNS are undervalued and will begin to appreciate as the company executes on its plan and certain catalysts occur over the next few quarters. TNS $15. m ar ke tf Financial services .99/month.com . Corsair Capital Management. we believe the company can earn $2. It should not be assumed that any trading activities pursued in the future will be profitable and may in fact result in losses. an international communications company. TNS core adjusted earnings of $2. this feature may well be bundled as part of a carrier's standard monthly services).TNS provides data transport to/from payment processors from/to endpoints like credit card machines etc.TNS provides direct data/voice connections to/from financial institutions and their clients. It is important to note that a rollout could take a few years as the technology will only be rolled out on new devices. CityID and NameID. and the company is incurring startup losses in a recently acquired new product line. If Cequint contributes to earnings in 2012 as management expects. if we assume 10% of US mobile customers pick up NameID and pricing is reduced to $0. but the upside potential here is quite large. and T-Mobile features NameID on its website and plans to offer the service for $3. However.20 implies the stock is trading at approximately 7. Below is a brief overvi We think the stock is undervalued because management disenfranchised investors after missing guidance in 2010. 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. Telecommunications services . This letter is not a research report or recommendation to buy or sell the securities mentioned herein. but the rest of world (ROW) is growing.Your Source For Hedge Fund Tracking Appendix TNS I nc.85) Point of Sale . We estimate that TNS gets ~40% of the economics with approximately 80% gross margins in line with software peers. others will decline. Some of these segments will see growth (roaming). The US side of this business has been challenged recently.

we believe the problems impacting previous quarters are mostly under control. we think the stock is worth at least 10 .00 $27. Our research and discussions with TNS management suggest the company can return to steady growth.10 0.0 x $22.10 $2. The examples herein are illustrations of ways in which Corsair Capital Management.00 $5.While tracking communications businesses such as TNS often proves difficult.20 10.5x. 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. at any time. TNS repurchased $22m of stock in 2010 and expects to repurchase another $30mm in 2011. The balance sheet has ~$330m of net debt or under 2. and we believe TNS can comfortably handle as much as 3.85 70% .$20.00 stock price excluding the value of Cequint. It should not be assumed that any trading activities pursued in the future will be profitable and may in fact result in losses.00 . LLC and its affiliates may. which translates to an implied $22. Valuation summary: 2011 EPS Guidance Midpoint Cequint Adjustment Core Normalized Earnings Power Price / Earnings Multiple Fair Value Potential Cequint Value Total TNS Value Current Stock Price Potential Return $2. ol ly . earnings stability.$42.165% m ar ke tf Click here for more hedge fund letters on MarketFolly. Corsair Capital Management. attractive operating leverage and low maintenance capex.00 $15. The company may also consider paying out a one-time special dividend which it has done in the past. The company has run at higher debt levels in the past. LLC and its affiliates have examined or may examine opportunities. strong free cash flow generation.com This letter is not a research report or recommendation to buy or sell the securities mentioned herein.5x net debt/EBITDA.00 .