RenRe’s Third-party capital AUM nears $7bn. Raises for brand spanking new Upsilon managed account

Third-party investor capital below administration in reinsurance joint-ventures and insurance-linked securities (ILS) funds managed by RenaissanceRe’s Capital Companions division reached virtually $7 billion in the beginning of 2024, with the agency’s disaster bond fund technique driving the most important share of the final 12 months’s progress.

renaissancere-buildingOver the course of 2023, RenaissanceRe’s Capital Companions unit added $750 million to its whole third-party capital below administration, with new capital offsetting a continued shrinking of the agency’s Upsilon collateralized reinsurance fund technique.

However there was a brilliant spot there on the finish of final 12 months as properly, as RenRe launched a brand new managed account below Upsilon for a single investor.

It’s the primary time RenRe has noticeably raised funds for a brand new Upsilon branded technique for fairly a while, as this ILS technique which is often centered on collateralized reinsurance and/or retrocession has been shrinking for various years now, which is an analogous expertise to many different non-public ILS contract centered funds within the market.

However, within the ultimate quarter of 2023, in time for the January renewals, RenRe launched the $90 million Upsilon RFO Diversified IV managed account for a single investor, we perceive.

That is one other sign that investor curiosity in collateralized reinsurance or retro non-public ILS methods is rising, with investor sentiment having been aided by the sturdy efficiency of ILS methods over the previous 12 months and improved reinsurance contract phrases now being entered into market-wide.

RenRe’s third-party Capital Companions belongings below administration rose from $6.2 billion in the beginning of 2023, to achieve $6.95 billion in the beginning of 2024, reflecting outright growth of $750 million during the last 12 months.

Some $670 million of progress got here via the Medici disaster bond fund, as RenRe capitalised on traders’ attraction to cat bond methods to carry this fund’s third-party belongings to $1.73 billion, whereas the Medici cat bond fund’s total AUM together with RenRe’s stake has now risen to $1.94 billion.

RenRe’s DaVinciRe joint-venture reinsurance car, which operates like a type of market-facing sidecar backed by third-party capital, lifted its third-party belongings by $160 million over the course of final 12 months.

One other spotlight of 2023 for RenRe’s Capital Companions was the continued growth of its Fontana specialty and casualty centered reinsurance joint-venture car, which entered 2024 with $450 million of third-party capital and $620 million when together with RenRe’s co-investment stake. A part of the Fontana increase was right down to the $50 million funding from AIG.

The expansion in some methods was offset by the principle Upsilon diversified fund shrinking throughout the 12 months, falling to $490 million of third-party capital by January 1st 2024, $570 million together with RenRe’s stake.

That’s down from $1.17 billion of third-party capital in Upsilon at 1/1 2023 and a complete dimension of $1.34 billion at the moment. It’s value noting that a lot of this discount in scale of the Upsilon fund is right down to capital being returned to traders.

However the newest information of a brand new $90 million Upsilon centered managed account is an efficient sign of the potential for RenRe so as to add extra belongings over time to this collateralized reinsurance and retro technique, which has optimistic read-across for the remainder of the ILS fund sector as properly.

With virtually $7 billion in third-party capital throughout the vary of joint-venture reinsurers and ILS funds, RenaissanceRe stays one of many largest managers of belongings within the ILS market.

Together with its personal stakes in every car and fund, whole capital managed throughout the RenaissanceRe Capital Companions automobiles reached $8.19 billion at January 1st 2024, not together with the $4 billion of capital that sits in High Layer Re.

The expansion in belongings and powerful efficiency from 2023 helped in RenaissanceRe delivering a big year-on-year uplift in price earnings earned from third-party reinsurance capital and insurance-linked securities (ILS) operations, with the full doubling final 12 months.

View info on many devoted ILS fund managers, in addition to reinsurers providing ILS type funding alternatives, akin to RenaissanceRe, in our Insurance coverage-Linked Securities Funding Managers & Funds Listing.

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