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January 27, 2015

Dear Limited Partner:


For the fourth quarter ended December 31, 2014, Corsair Capital was up an estimated 3.5%* net, after all fees and
expenses, bringing our 2014 performance to 4.5%*. Corsair Select was up an estimated 5.4%* net, after all fees and
expenses, bringing our 2014 performance to 5.4%*. Since inception in January 1991, Corsair Capitals compounded
net annual return is 13.8%*. Since inception in January 2004, Corsair Selects compounded net annual return is
13.3%*.

Corsair Capital (net)* HFRI - EHI**


4Q14 return
3.5%
0.4%
YTD return
4.5%
2.3%
Annualized since inception (1991)
13.8%
12.2%
Total return since inception (1991)
2139%
1477%

S&P 500
4.9%
13.7%
10.2%
925%

Russell 2000
9.7%
4.9%
11.2%
1170%

Corsair Select (net)* HFRI - EHI**


4Q14 return
5.4%
0.4%
YTD return
5.4%
2.3%
Annualized since inception (2004)
13.3%
5.0%
Total return since inception (2004)
296.6%
70.6%

S&P 500
4.9%
13.7%
8.0%
132.3%

Russell 2000
9.7%
4.9%
8.7%
149.9%

Although it now seems like quite some time ago, when we sent out our last quarterly investment letter, the equity
markets were in the middle of a nasty pullback led by the Russell 2000 Index, which was showing a nearly 9% loss
for the then year-to-date period. Worries over possible higher interest rates due to the Federal Reserve ending its
quantitative easing program and new concerns over the inability of western European nations - especially France
and Italy - to meet their promised deficit spending reductions were weighing on investors. However, in hindsight,
we can also now surmise it was likely the Ebola outbreak - and associated newspaper headlines - that really
spooked the market and caused many investors to shift into a "risk-off" mode.
Fortunately, for those not residing in certain African countries, the Ebola scare ended up being just that: a scare.
Nevertheless, the possibility of an epidemic certainly stirred investors' worst imaginations as can be seen from the

*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. (Corsair Capital) or Corsair Select, L.P. (Corsair Select), as indicated. The figures for each such fund are based on an investment made as of the
inception of such fund, are calculated net of such funds fees and expenses, are based on unaudited data, and may be subject to adjustment. Additionally, the figures
for each fund are calculated using the highest management fee per annum rate generally offered by such fund at the time for Corsair Capital, a 1.00% rate through
May 2002, a 1.25% rate from May 2002 through 2009, and a 1.50% rate commencing January 2010; and for Corsair Select, a 2.00% rate since inception. Although the
portfolios of the other funds within the Corsair Capital family and the Corsair Select family have been substantially similar to either Corsair Capital or Corsair
Select, as applicable, 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.
** Hedge Fund Research, Inc. - Equity Hedge (Total) Index
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. Additionally such examples do not represent Corsair Capitals entire portfolio and in the aggregate may
represent only a small percentage of Corsair Capitals portfolio holdings. 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 either now or in the future will be profitable. Such activities may in fact result in losses.

CORSAIR CAPITAL MANAGEMENT, L.P. 366 MADISON AVENUE, 12TH FLOOR NEW YORK NY 10017 212.949.3000

extreme interest in two very small companies that manufacture protective medical gear and clothing -- Lake
Industries ("Lake") and Alpha Pro Tech ("Alpha"). During the summer, Lake was a micro-cap company (7,000,000
shares outstanding) trading a mere 10,000 shares a day at $6/share. By October 8th, Lake was trading nearly
100% higher ($11.62) on daily turnover of 10,000,000 shares. On October 9th alone, Lake traded up another 60%
on an astounding 48,000,000 shares! Finally, Lake peaked at $29/share on October 13th, the exact day the Russell
2000 bottomed. Likewise, Alpha, at $2.50/share and just 18,000,000 shares outstanding, was trading 50,000
shares/day during the summer. Alpha similarly proceeded to triple in value by October 10th, when an amazing
39,000,000 of its shares traded hands and then it too peaked exactly on October 13th.
As the Ebola fear subsided, markets quickly began to rally. The markets gained further momentum when one of the
Federal Reserve Banks' presidents, James Bullard, suggested that quantitative easing could be extended if the
economic data justified doing so. Additionally, the Fed released a policy statement that said it would maintain nearzero interest rates for a "considerable time" after winding up quantitative easing. On October 31st, Japan provided
equity investors an extra "Halloween treat" when it announced a surprisingly large increase in its QE program
(nearly equal to that of the United States despite its economy being just 1/3rd our size) and that both the Bank of
Japan and the government's pension plan would be buying significantly more equities and real estate.
You may also recall that we discussed the 20% decline in the price of oil in last quarter's letter. At that time, we and
others thought this would be good for most equity markets. However, with oil subsequently plummeting to
$50/barrel (down 55% from its peak in June), there is some question as to how much is too much of a good thing.
With Saudi Arabia refusing to reduce its oil production in order to stem the price decline, various geo-political
concerns could come into play. Already hurting from certain economic sanctions, Russia saw the ruble drop by
more than 50%, primarily due to the lower price of oil. While it would seem positive to have both a weakened
Russia and various Middle Eastern countries, the world might be a more dangerous place should their
governments become [economically] truly desperate. In early December, U.S. equity markets quickly dropped
approximately 5% on these concerns before rallying to new highs at year-end.
As we begin Corsair's 25th year, equity markets have again pulled back a bit due to the perceived slowing of global
growth, new worries about Greece leaving the Euro, and the potential rise of global terrorism given the horrific
attacks in Paris. Interestingly, the S&P 500 fell by 3.5% last January before rallying strongly on a somewhat similar
set of worries. We continue to see central banks around the world trying to stimulate their economies through
quantitative easing and lower interest rates, including negative rates for up to 2 years in Germany and Switzerland.
Again, per last quarter's letter, given the level of longer-term interest rates worldwide, stocks still seem at a
minimum to be fairly valued. Furthermore, with 10-year yields now under 2% in the United States (down from 3%
last year), and well-under 1% in Germany, France, and Switzerland, a good argument can be made that stocks are
actually still inexpensive and mathematically would still be attractive even at 4% yields. Importantly for Corsair,
we continue to find value in misunderstood stocks amid a robust environment for companies undergoing strategic
transformation.

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. Additionally such examples do not represent Corsair Capitals entire portfolio and in the aggregate may
represent only a small percentage of Corsair Capitals portfolio holdings. 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 either now or in the future will be profitable. Such activities may in fact result in losses.

CORSAIR CAPITAL MANAGEMENT, L.P. 366 MADISON AVENUE, 12TH FLOOR NEW YORK NY 10017 212.949.3000

Portfolio Update
The largest contributors/detractors to our performance during the fourth quarter were as follows:
Republic Airways Holdings ("RJET") rose 31% and closed the fourth quarter at $14.62. RJET reported solid Q3
results and, in December, announced an agreement with Delta to add 9 more large jets to its contract and extend
the agreement well past 2020, providing more top and bottom line growth for RJET over the coming years.
Additionally, the company disclosed that negotiations are underway for the sale of its Chautauqua Airlines
subsidiary, a non-profitable small jets business. The Chautauqua sale would free up a number of pilots over time,
enabling the company to fly more jets under RJET's new/expanded agreements with American, United, and Delta.
With pro forma cash earnings of $3.50/share once the new contracts are fully ramped, RJET continues to be a
misunderstood and highly undervalued stock in our view.
KAR Action Services ("KAR") gained 21% on a strong Q3 report, reflecting particularly good results in its whole car
business. KAR also raised its dividend 8.5% and, importantly, announced its first share repurchase program.
Welcomed by the market, these shareholder friendly actions bolstered managements credibility, fulfilling a
promise to return capital to shareholders. Good visibility pointing to an increase in off-lease car volumes over the
next few years gives us confidence that KARs earnings momentum will continue. We continue to believe KAR can
easily trade towards 15x its 2016 free cash flow of $3/share. KAR closed the year at $34.65.
Ryman Hospitality Properties ("RHP") climbed from $47.30 to $52.74 during the quarter. RHP reported strong Q3
results, reflecting the success of its long transformation from a C-corp to a REIT and the sale of its hotel
management rights to Marriott. The company repaid its convertible debt during the quarter, an important step
toward cleaning up its capital structure. Additionally, lower interest rates helped most real estate related stocks,
including RHP. RHP continues to trade at a discount to its peer group, yet has a unique portfolio of assets with
significantly better revenue visibility. As the company executes on its final stages of transformation, we expect the
valuation gap to narrow.
Orora Ltd ("ORA") increased 19% in the quarter and closed the year at AUD 1.95. Highlighted in our Q1 2014 letter,
ORA has continued to execute on its business plan and increase its free cash flow generation. In December,
Goldman Sachs initiated research coverage of ORA with a BUY rating, introducing the stock to a much broader
investor base. We expect further catalysts to lift the stock in 2015, including the continued execution of the costcutting program and a dividend increase. Eventually, we believe ORA could find itself as an acquisition target,
potentially drawing interest for parts of its business or the entire company from both strategic and financial
buyers.
American Realty Capital Properties ("ARCP") was our only significant loser during the quarter, dropping from
$12.06 to $9.05 at year-end. At the end of October, ARCP announced that the previously reported Adjusted Funds
from Operations (AFFO) for the first half of 2014 was overstated by $0.03 per share. More shocking to investors
was ARCP's disclosure that both the chief financial officer and the chief accounting officer were terminated for
intentionally hiding this error. Initially, CEO David Kay assured the market that he was confident there were no

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. Additionally such examples do not represent Corsair Capitals entire portfolio and in the aggregate may
represent only a small percentage of Corsair Capitals portfolio holdings. 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 either now or in the future will be profitable. Such activities may in fact result in losses.

CORSAIR CAPITAL MANAGEMENT, L.P. 366 MADISON AVENUE, 12TH FLOOR NEW YORK NY 10017 212.949.3000

other misstatements and believed the market was over-penalizing the stock with a drop of over 30%. In fact, the
chairman of ARCP's audit committee reportedly remarked, "everyone in the market is making a mountain out of a
molehill here." Interestingly, as time passed, management seemed to be less confident about the quality of the
companys financials and the timing of re-filing its quarterly statements. Subsequently, both Chairman Nick
Schorsch and CEO David Kay were forced to resign. Not surprisingly, shareholder lawsuits have been filed against
the company and its equity underwriters. We will summarize by saying the following: Fraud in our financial
markets is a very serious matter. We are hopeful that the U.S. judicial process in this matter will result in 1) a
recovery of some of our ARCP losses and 2) an appropriate and fair decision as it relates to any potential criminal
behavior.
As of January 1, 2015, the five largest positions in Corsair Select were IAC, KAR Auction Services, Orora, Republic
Airways, and Voya Financial.
Organizational Matters
We are pleased to announce that Corsair Capital Partners and Corsair Select were recently approved onto the
alternative investments platform at the Jewish Communal Fund (JCF). JCF is an independent public charity that
facilitates and promotes charitable giving through donor advised funds. A donor advised fund is a convenient, cost
effective, and tax-efficient vehicle that organizes and simplifies charitable giving. With over $1.3B in assets under
management, JCF is one of the largest donor advised funds in the country and its more than 3,100 individual funds
have collectively granted more than $300MM annually to charities in all sectors.
Also, please note that our annual investor conference will be on Wednesday, March 12th at the Harvard Club in
NYC.
As always, 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 212-949-3000.
Sincerely,
Corsair Capital Management, L.P.

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. Additionally such examples do not represent Corsair Capitals entire portfolio and in the aggregate may
represent only a small percentage of Corsair Capitals portfolio holdings. 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 either now or in the future will be profitable. Such activities may in fact result in losses.

CORSAIR CAPITAL MANAGEMENT, L.P. 366 MADISON AVENUE, 12TH FLOOR NEW YORK NY 10017 212.949.3000

Appendix Calpine Corp (CPN $21.50)


CPN is Americas largest generator of electricity from natural gas and geothermal resources. Despite being an
independent power producer (IPP) operating in unregulated markets, CPNs assets actually produce steady,
predictable and growing cash flows much like a regulated utility. With investors focused on plunging oil prices,
spark spreads, and troubled energy companies, we believe a producer of energy with essentially no exposure to a
commodity is an excellent investment opportunity that is being overlooked by the market. CPN is trading at a 2015
free cash flow yield of over 10%. It is our view that given CPNs inherent competitive advantages, the stability and
continued growth of its cash flows and its high quality management team, the company should be valued at a
significant premium to its IPP peers or more in line with power utilities. The management team has a proven track
record of creating value and is using capital allocation to unlock the underlying value of CPN. We expect that with
growing cash flows from asset acquisitions and a shrinking share count as a result of an aggressive stock buyback
program, the stock could trade substantially higher over the next 12-18 months.
Business Summary
unlike virtually every other competitor, the risk of a lower gas price environment over the next couple of years does
not threaten our business model. In fact, it provides us opportunity. CEO Thad Hill
CPN produces power in 3 key regions of the U.S. Texas, the East (including Pennsylvania, Delaware, New York,
New Jersey, Massachusetts), and the West (mainly Northern California). Other than a small portfolio of geothermal
assets in California, CPN is a producer of electricity using natural gas. Given the availability of natural gas in this
country and its low cost, it has become the key driver of electricity prices in power markets. CPN benefits from a
natural hedge, given its power is produced and sold based on the price of the same commodity this has
positioned CPN with a significant competitive advantage versus other IPPs .
As such, CPN has posted steady financial results in essentially all environments. Despite fluctuations in the price of
natural gas, adjusted EBITDA has, for the most part, consistently grown for the past 8 years. Due to CPNs stable,
yet growing, stream of free cash flow, the company looks more like a regulated utility than an IPP. However, CPN
also benefits from a competitive advantage versus regulated utilities. Given the high importance of a utilitys
balance sheet, credit rating and cost of capital, most of these regulated energy providers sell their power, or
hedge, several years into the future to improve visibility and lock in cash flows. Because there are fewer buyers of
power 3 years from now versus 1 year from now, utilities typically sell electricity at a discount. Outside of
generating revenue from 20-year power purchase agreements and capacity reliability fees, CPN sells its electricity
up to 1 year forward, where demand is rich and the price being paid is more reflective of fundamentals.
Our clean, modern, efficient and flexible fleet is poised to benefit from the secular trends playing out in the U.S. power
generation industry. CEO Thad Hill
CPN is also well situated from the perspective of its fleet and the increasing scrutiny being directed toward other
forms of power production. CPNs power plants are significantly younger, environmentally cleaner and more

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. Additionally such examples do not represent Corsair Capitals entire portfolio and in the aggregate may
represent only a small percentage of Corsair Capitals portfolio holdings. 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 either now or in the future will be profitable. Such activities may in fact result in losses.

CORSAIR CAPITAL MANAGEMENT, L.P. 366 MADISON AVENUE, 12TH FLOOR NEW YORK NY 10017 212.949.3000

efficient than the plants of its competitors, which are powered by other sources of fuel including oil, coal and
nuclear energy. Furthermore, along with the environmental costs associated with coal-fired power production, the
recent drop in the price of natural gas could also drive users of coal-fired electricity to switch to cheaper natural
gas.
Management & Capital Allocation
Our foremost objective is to maximize levered cash-on-cash returns to equity while being prudent with the balance
sheet. CEO Thad Hill
CPNs management team, headed by Chairman Jack Fusco and CEO Thad Hill, is focused on unlocking value through
share repurchases and asset acquisitions in the companys 3 target markets. Hill believes that CPN is considerably
undervalued and should be valued on a free cash flow per share basis. Simply put, he views CPN as a utility.
However, rather than pay a utility-like dividend, the company continues to repurchase shares at these low
valuations , with already $1 billion worth of stock repurchased through the first 3 quarters of 2014. Hills main
priority is shareholder returns, and is focused on creating value in the stock.
But actions speak louder than words; this management team has successfully used this playbook before. In 2004,
after the de-regulation of the Texas power market, several private equity firms including Hellman & Friedman,
Texas Pacific Group, Blackstone and KKR, joined forces to take a company owned by Centerpoint Energy (CNP),
called Texas GenCo Holdings (TGN), private for $3.7 billion $900 million in equity and the remainder financed
with debt. The consortium of private equity firms hand-picked Jack Fusco and Thad Hill to run the company. In
February of 2006, Fusco, Hill and the consortium decided to sell Texas GenCo to NRG Energy (NRG) for $8.3
billion. With $5.8 billion netting to the equity holders, Fusco and Hill oversaw a $4.9 billion equity return, or 550%,
in just 18 months. We think Fusco and Hill are using a similar formula at CPN of manageable leverage to produce
outsized equity returns over time. Additionally, should a large utility wish to integrate regulated and unregulated
assets, it could acquire CPN in an accretive, transformational deal. And most importantly as a CPN shareholder, we
believe Hill would be willing to sell at the right price, as hes done in the past.
Valuation
We think our stock is a great buy. CEO Thad Hill
The value proposition at CPN was recently highlighted by management in a new slide in the November 6, 2014
Third Quarter 2014 Earnings presentation. The new slide, on page 6, displays both CPNs stable adjusted EBITDA
despite volatile gas prices and CPNs free cash flow yield being at a 5-year high. Given the track record of this
management team, we view the addition to its slide deck as a material inflection point in getting investors and sellside analysts to value the stock appropriately.
This valuation gap illustrates the shortcomings of EBITDA multiple valuations, which may not fully capture
underlying free cash flows, net asset values, or potential upside. Chairman Jack Fusco

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. Additionally such examples do not represent Corsair Capitals entire portfolio and in the aggregate may
represent only a small percentage of Corsair Capitals portfolio holdings. 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 either now or in the future will be profitable. Such activities may in fact result in losses.

CORSAIR CAPITAL MANAGEMENT, L.P. 366 MADISON AVENUE, 12TH FLOOR NEW YORK NY 10017 212.949.3000

At todays stock price, CPN is trading in line with IPP peers at ~9x 2015 EBITDA. However, as Hill has said, not all
EBITDA is created equal. We agree with managements view that the stock should trade more in line with utility
stocks and on a multiple of free cash flow per share. With a net operating loss balance of over $12 billion, GAAP EPS
does not fully reflect the earnings power of this business. As Hill has said, he runs the business for cash and not for
accounting metrics. At 15x 2016 free cash flow of $2.65/share (vs utility stocks with P/E multiples in the high
teens), CPN stock could trade for $40/share in the next 12 months. We also expect free cash flow per share to grow
to over $3/share in 2017 as new capacity starts up and more shares are repurchased potentially leading to a
stock price of $45/share or greater in 18 months.

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. Additionally such examples do not represent Corsair Capitals entire portfolio and in the aggregate may
represent only a small percentage of Corsair Capitals portfolio holdings. 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 either now or in the future will be profitable. Such activities may in fact result in losses.

CORSAIR CAPITAL MANAGEMENT, L.P. 366 MADISON AVENUE, 12TH FLOOR NEW YORK NY 10017 212.949.3000