Reinsurance firm and third-party capital manager RenaissanceRe grew its insurance-linked securities (ILS) assets under management (AuM) by $500 million in 2018, with much of the increase coming from its recently launched Vermeer Reinsurance Ltd. strategy as well as growth in its Upsilon vehicle.
In line with analysts’ expectations, RenRe increased its third-party, or alternative reinsurance capital operations in 2018, with the total AuM across its funds/strategies jumping from $3.6 billion at the end of January, to $4.1 billion as of the end of December, 2018.
The majority of the growth came from its new Vermeer reinsurance joint-venture, which has the sole backing of ILS investor PGGM, and, which as of the end of December 2018, had an AuM of $600 million.
Vermeer was launched towards the end of December last year, with analysts stating at the time that it helps the reinsurer “address more of its cedents’ concerns”, a move that introduces a different element to the Bermudian’s ILS operations.
Further AuM growth of more than $90 million was recorded in RenRe’s Upsilon fund, which ended 2018 with total assets of $891 million. The RenRe Medici ILS fund also grew the volume of third-party investor capital it manages through 2018, by almost $100 million to $499 million, as at December 31st, 2018.
RenRe’s DaVinciRe vehicle ended 2018 at approximately $1.5 billion in size, including debt.
The reinsurer’s Fibonacci Re sidecar-like vehicle, that issues a catastrophe bond like note, also witnessed a slight decline in AuM over the course of 2018, ending the year at $73 million, down from $115 million, again likely due to the impact of catastrophes.
Langhorne Re, the firm’s life and annuities focused joint-venture with Reinsurance Group of America (RGA), ended 2018 with the same AuM as it had at the end of January 2018, of $780 million.
At $4.1 billion of third-party reinsurance capital under management, RenRe is now one of the top 10 ILS managers in the world, as shown by the Artemis ILS investment managers & funds directory.
After two consecutive years of losses, it was always going to be interesting to see how ILS funds reacted in the latter stages of 2018, and whether the ‘great reload’ of the previous year would repeat itself.
Perhaps unsurprisingly to many ILS market participants, this didn’t happen.
But, while the inflow of alternative capital slowed at the January 2019 renewals and some funds saw their AuM decline, others, like RenRe, managed to increase their third-party capital management operations, either through the launch of new strategies or the raising of additional capacity in existing funds.