RenRe Achieves Record Q2 Fee Income from Third-Party Capital, Strong Profits Shared with JV & ILS Investors

RenaissanceRe (RenRe), the Bermuda-based reinsurer and third-party capital manager, has announced record-breaking fee income in Q2 2025 through its Capital Partners division. This growth was fueled by strong performance across its joint ventures (JVs) and insurance-linked securities (ILS) funds, with a significant portion of profits being shared with third-party investors.

Capital Raises Slowed, But Strategy Remains Strong

Although capital raising during Q2 2025 slowed compared to previous quarters, RenRe’s management appears confident that its third-party capital and ILS strategies are appropriately sized for current market conditions.

While the company raised $462 million in new capital in Q1 2025, Q2 saw a more modest $106.1 million added. This includes:

·         $81.3 million allocated to its Medici catastrophe bond-focused fund (type unspecified – either UCITS or offshore)

·         $17.5 million directed to the Upsilon Diversified ILS fund, focused on collateralized reinsurance and retrocession

However, consistent with seasonal trends and investor redemptions, more capital was returned than raised in Q2. RenRe returned $216.7 million to investors, including:

·         $153 million from Upsilon Diversified

·         $56.7 million from the Medici strategy

Despite this, Medici’s net capital still grew during the period, showing investor confidence in the strategy.

Profits Reach One of the Highest Levels Ever for Third-Party Capital Investors

RenRe delivered $328.3 million in net income to third-party capital investors in Q2, marking one of its highest ever profit-sharing quarters (surpassed only by Q3 2024). This performance was largely driven by:

·         Underwriting success in the DaVinci JV (sidecar-like structure)

·         Strong results from Vermeer Re, backed by PGGM

·         Solid investment returns across ILS fund strategies

These returns signal a rebound from Q1, when California wildfire losses reduced fee income and dented investor returns.

Record-Setting Fee Income: Nearly $95 Million in Q2

RenRe’s Capital Partners unit reported $94.95 million in fee income in Q2—a record high for the company, surpassing the prior record of $84 million from Q2 2024. This included:

·         $56.4 million in management fees

·         $38.55 million in performance fees (up $10 million YoY)

Performance fee growth was attributed to strong underwriting across vehicles—especially DaVinci and Upsilon—as well as favorable reserve developments.

The figure reflects not only RenRe’s robust fund performance, but also continued expansion in assets under management (AUM). As of March 31, 2025, AUM reached a record $7.94 billion—a growth of $770 million year-over-year.

Capital Metrics and Market Impact

One of RenRe’s capital tracking metrics, redeemable noncontrolling interests, rose slightly to $7.04 billion in Q2. However, this does not represent the full scale of the company’s ILS and third-party capital base, which exceeded $8 billion by the end of Q1.

The strong Q2 results also highlight broader momentum in the third-party capital and ILS markets, suggesting improved returns for many investors compared to the previous quarter.

CEO Commentary and Outlook

RenRe CEO Kevin O’Donnell praised the team’s performance, stating:

“We delivered outstanding results this quarter... Underwriting and fee income reached record highs, and investment income remained near peak levels.”

He also highlighted:

·         A 24.2% annualized operating return on equity

·         10.4% YTD growth in tangible book value per share

·         Successful execution at mid-year renewals, particularly in property catastrophe reinsurance

RenRe expanded catastrophe underwriting by $98.1 million (7.8%) in gross premiums during Q2, thanks to strong client retention, new business, and attractive pricing in the U.S. catastrophe market.

Conclusion

RenRe's Q2 2025 performance showcases the company’s strength in navigating reinsurance markets with precision. With record fee income, high profit-sharing to investors, and strategic capital deployment, RenRe’s third-party capital and ILS platforms continue to drive substantial value for investors and shareholders alike.