Upsilon fundraising sees RenRe’s third-party capital near $5bn

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Fresh capital raising for 2019 in its Upsilon vehicle has taken RenaissanceRe’s third-party reinsurance and insurance-linked securities (ILS) capital under management close to $5 billion.

RenaissanceRe logoAs we explained last week, at the end of 2018 RenRe’s third-party capital and  insurance-linked securities (ILS) assets under management reached $4.1 billion, driven largely by the launch of its Vermeer Re joint-venture reinsurance vehicle, which it launched alongside Dutch pension fund manager PGGM.

But the reinsurer then took advantage of better rates and pricing at the January renewals to expand its third-party capital haul, expanding in particular its Upsilon vehicle and associated ILS fund strategies.

Upsilon is focused on underwriting and investing its capital in both collateralized reinsurance and retrocession business.

But we understand that it was the rate increases in the retro market that helped RenRe to achieve significant growth of assets under management at 1/1 2019, as the issues related to capital supply into the retro market provided the firm with an opportunity for growth.

Upsilon stood at $891 million in size at the end of 2018, but for the January 1st renewals RenRe raised over $500 million for the vehicle, taking it to $1.4 billion in size.

The company told us that this includes an element of trapped collateral, so could not all have been deployed afresh, but it does expect some of that will be returned to investors in Upsilon once loss amounts have been settled on.

As well as a little growth in RenRe’s Fibonacci Re sidecar-like vehicle, that issues a catastrophe bond like note, which grew from $73 million at the end of 2018 to $100 million at January 2019, the increase in assets at Upsilon takes RenRe’s third-party capital pot to $4.9 billion, just shy of $5 billion.

At $4.9 billion of third-party reinsurance capital under management, RenRe is now firmly in the top 10 ILS managers in the world, as shown by the Artemis ILS investment managers & funds directory.

The reinsurer will likely surpass the $5 billion mark by the middle of the year, as opportunities to raise fresh capital are likely to emerge thanks to higher rates in retrocession and more broadly across loss affected reinsurance renewal accounts.

View details on many ILS fund managers and reinsurers managing third-party capital in our directory here.

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