RenRe lifts third-party AuM to $6.4bn, as Upsilon surges to new high

RenaissanceRe, the Bermuda headquartered global reinsurance company, has lifted its third-party capital assets under management to a new high of $6.4 billion as of January 1st 2021.

The increase in third-party capital under management in RenaissanceRe’s range of insurance-linked securities (ILS) and joint-venture structures was largely due to additional capital being raised for its Upsilon collateralized reinsurance and retrocession focused fund.

As we had previously reported, RenaissanceRe (RenRe) said that it added approximately $750 million of capital to its ILS funds and reinsurance joint-ventures, with the collateralised reinsurance and retrocession focused Upsilon RFO Re Ltd., the third-party capitalised and market facing reinsurer DaVinciRe Ltd. and its RenaissanceRe Medici Fund Ltd., which invests in catastrophe bonds and other reinsurance-linked assets, the main beneficiaries.

RenRe had also revealed that around $131 million of this capital was from the company itself, so not all third-party assets under management. In addition, RenRe entered into secondary transactions with third-party investors resulting in a net purchase of an additional $117 million of DaVinci shares.

Now, the company has disclosed its latest information on its third-party reinsurance capital initiatives, so we now have its page updated within our Artemis’ ILS fund manager directory.

It’s clear that most of the third-party capital raising around the January 2021 renewals was channelled to the Upsilon ILS fund.

Upsilon had around $2 billion of assets at the end of September 2020, which fell slightly to $1.9 billion at December 31st, likely as the company returned some capital to investors at the end of the underwriting year.

But fresh capital raising and new investor commitments at 1/1 2021 saw RenRe raising another roughly $500 million for the Upsilon Fund, around $33 million of which was from RenRe itself.

This was net of capital returned to investors and on top of this RenRe also raised a further $150 million at 1/1, which was ultimately returned to the investors in January.

That took Upsilon to $2.4 billion in size as of January 1st 2021, a new high for the collateralized reinsurance and retrocession fund structure.

Growth has also been seen in RenRe’s Medici ILS fund, which invests largely in catastrophe bonds, as well as some other securitized reinsurance linked assets.

The Medici ILS fund counted $788 million of assets at the end of September 2020, which increased to $850 million by the end of December, but then rose further to $863 million as of January 1st 2021.

RenRe also grew DaVinciRe at 1/1, but this was largely using its own funds, but still DaVinciRe reached $2.4 billion in size, including its debt at 1/1.

The other joint-ventures, such as Vermeer and Langhorne Re remained static at the end of the year.

So, Upsilon has driven most of the growth in third-party capital managed for RenRe at the end of the year and into the January 2021 renewals.

The ILS funds and managed joint-venture structures RenRe operates now have around $7.5 billion of capital in them, of which RenRe’s share is $1.1 billion and so third-party investors supply the other $6.4 billion.

View details of dedicated ILS fund managers and reinsurers offering ILS style investments in our Insurance-Linked Securities Investment Managers & Funds Directory.