RenaissanceRe (RenRe), a Bermuda-based global reinsurer and third-party capital management specialist, reported raising $350.5 million in new capital from investors during the second quarter of 2023, primarily for catastrophe bond strategies.
The company said it has raised $170.5 million from investors for its Medici fund strategy, which is primarily a strategy for catastrophe bonds.
The reinsurer also raised $150 million in funding for a new separate account focused on investing in insurance-linked securities (ILS), which RenaissanceRe said was also largely composed of cat bonds.
RenRe pulled in impressive new funding in the first quarter, saying it raised $621.2 million in third-party capital for its DaVinci Re reinsurance and equity-like sidecar-focused and Medici cat bond strategies.
As we reported in May, RenRe’s third-party assets under management (AUM) dedicated to its property and casualty reinsurance business increased by $400 million in the first quarter, bringing total assets under management to a new high of $6.6 billion as of March 31.
Given the incremental capital raised in 2Q23, PICC’s total third-party investor AUM dedicated to P&C reinsurance could increase further by mid-year.
However, the company has also seen some redemptions of third-party capital, which may mean that the total amount will not increase as much as expected, mainly due to the further release of trapped capital to return to investors in Upsilon’s reinsurance and retrocession fund vehicles.
Investors redeemed $313 million in capital during the second quarter of 2023, with $285.6 million of that coming from the Upsilon Diversified Fund, RenRe said.
These capital returns, RenRe said, are the result of releasing collateral related to contracts from previous years, thus effectively releasing trapped capital that can now be returned to investors in the Upsilon structure.
This is a positive for returning capital to the investors behind the strategy, as RenRe continues to grapple with previous year catastrophe loss exposure contracts written or participated in for the Upsilon Fund and its investors.