Private Equity Firm Corsair Capital’s New Activist Position

D.T. Ignacio Jayanti’s Corsair Capital LLC is a private equity firm specializing in special situations and distressed investing. They have a very concentrated portfolio. The firm focuses on banks, financial institutions, financial services companies, asset managers, advisory firms, credit cards and consumer finance companies. Currently the firm has only four stocks in its portfolio. Their largest investment is NewStar Financial (NEWS). They have $100 Million in NEWS at the end of March. The position is unchanged compared to the end of December.

Corsair’s second largest investment is First American Financial (FAF). First American spun off Corelogic (CLGX) on June 1^st, 2010. This was probably the reason why Corsair invested in FAF. First American closed at $14.31 on June 2nd and started to decline for the next six trading days. It closed at $12.17 on June 10th. The stock returned 30.8% since then.

On April 11^th, Corsair filed a 13D form with the SEC and disclosed a 5+% activist stake in United Community Banks Inc (UCBI). They accumulated most of their position at prices below $2 per share. Currently the stock trades at $2.33.

Tom Brown’s Second Curve and Mark Broach’s Manatuck Hill Partners have positions in NewStar Financial as well. The stock lost about 3% so far this year. Jonathan Jacobson’s Highfields Capital and Mariko Gordon’s Daruma Asset Management have much larger positions in First American. Jonathan Jacobson and Ric Dillon’s Diamond Hill Capital are among the hedge funds with large holdings in CLGX.