well-rated risk that we believe serves as the foundation for a strong portfolio with superior returns. We believe that we have timed this growth well and are excited about the improved profitability we are already beginning to see from a much larger portfolio in a much better market. Fee Income Our second driver of profit is the fee income we earn on our Capital Partners business. For the year, management and performance fees totaled $129 million. We successfully raised over $1.1 billion in capital across Upsilon, DaVinci, Vermeer and Medici in 2021 plus an additional $663 million for the January 1, 2022, renewal (with $468 million of the $1.8 billion total representing our co-investment alongside our partners). It was a challenging market to raise new funds, as third-party capital continued to experience fatigue due to a fifth consecutive year of elevated catastrophe losses and ongoing trapped collateral. Our ability to raise significant funds in this environment was a testament to the deep experience of our Capital Partners team and the relationships we have built over more than 20 years in this business. We offer a differentiated value proposition, with deep expertise and a commitment to share our investors’ risk. In addition to the fee income it generates, our Capital Partners business increases our ability to optimize our Gross-to-Net strategy across all our balance sheets, enhancing Superior Risk Selection. This was evident at January 1, 2022, when we grew DaVinci by $500 million and increased the percentage of property catastrophe business we allocated to it. This was good for our customers, allowing us to continue to support their programs during a period of market dislocation; good for our third-party capital partners, who continue to benefit from our ability to access the best risk and build high quality efficient portfolios; and good for our shareholders, who will gain from increased fee income and optimized portfolio construction across all our vehicles. Our Medici catastrophe bond fund continues to execute extremely well and had strong returns in 2021. Medici surpassed $1 billion in capital in the year, and we anticipate continued robust investor demand in 2022. Upsilon was affected by losses and trapped capital in 2021. At the January 1 renewal, we chose to restructure much of the aggregate and single limit programs typical of Upsilon to fit the appetite of our other vehicles, resulting in Upsilon deploying less than half the limit it did in 2021. Investment Income Our third driver of profit is investment income. We take a disciplined approach in building relatively conservative, well-structured portfolios with a focus on fixed income investments. As a result, our investment income over the last several years has been impacted by historically low interest rates. Looking forward, however, our investment portfolio is positioned to benefit from increasing interest rates. While rising rates would have an initial negative mark-to-market impact on our investment portfolio, due to our relatively low duration, we would expect to more than recoup these losses over time through reinvestment in higher yielding securities. CLIMATE CHANGE Given the multiple weather-driven natural catastrophes the world experienced this year, climate change continues to be an important issue. The academic research as well as the recent Intergovernmental Panel on Climate Change (IPCC) 6 th Assessment Report are aligning to a more unified view of how and when the climate is likely to change. We share the IPCC’s view, which is consistent with the way we reflect climate risk in our models. For almost two decades, we have invested heavily to understand the influence of climate change on the weather and its effect on the risk we take. RenaissanceRe Risk Sciences is the culmination of this investment. It provides us with a significant competitive advantage in assessing the impact of climate change, and allows us to continuously update our models to reflect the latest science. But while climate change clearly drives weather, how much of the volatility experienced in the last few years is directly related to it? As with most real-world phenomena, the answer is a complex mix of interrelated causes. It is hard not to see the fingerprints of climate change when looking at the many record-breaking events of the last five years. But we also know that there are other environmental influences at work that result in alternating active and quiet periods for hurricanes and other climatic events. An equally important influence on recent volatility has been the impact of social inflation. As much as storms are getting stronger and more frequent, which we can model for, social inflation and outright fraud are also increasing loss costs in ways that are much more difficult to quantify. Building cost inflation – as well as the continuation of the social inflation we saw in Hurricane Irma in 2017 – are both playing a larger role in the cost of catastrophes in the United States and beyond. So, while we actively adjust our view of hurricane risk for the influence of climate change, we also reflect the impacts of social and building cost inflation when modeling and building our portfolios. II. Purpose and ESG Strategy PURPOSE, VISION AND MISSION During 2021, we adopted a Purpose Statement and updated our Vision and Mission statements. Having a clear and concise understanding of our purpose, vision and mission is the foundation of our consistent strategic approach. Our purpose is quite literally why we exist, and by adopting a strategy clearly tailored to reflect this purpose, we are able to maximize our utility to stakeholders. While our purpose captures who we are, our vision and mission demonstrate how we are uniquely positioned to fulfill our purpose more effectively than our competitors. The aggregate of our purpose, vision and mission defines the value proposition that enables us to deliver superior returns for our shareholders. Purpose Beginning with purpose – this is the answer to the question of “What is our value to the world?” For RenaissanceRe, our purpose is to “protect communities and enable prosperity.” Much is resident in this brief statement. At the most basic level, we provide protection against fortuitous losses, most notably from natural catastrophes, by assuming the largest and most difficult to insure risks in society. Shifting a risk from the vulnerable to the resilient has broad, macroeconomic benefits, as well as potentially facilitating the internalization of harmful negative externalities in those responsible for creating them. When catastrophic events occur, we provide the capital so insurers can pay claims to homeowners and other stakeholders to rebuild their houses and restore their communities. In addition, our products provide robust signals concerning risky behavior, which encourage safety and promote mitigation. Reinsurance also enables prosperity. It does this by encouraging a Pareto efficient allocation of capital for potential future losses. As I have explained in previous Letters to Shareholders, this is the ideal balance between undersaving and oversaving, which maximizes capital available for other productive purposes in society, while minimizing the risk of uninsured economic loss (which is the protection gap). The result is the Goldilocks scenario of an economy making the most of its resources (prosperity) while simultaneously preparing for potential disasters (protection). I passionately believe our purpose engenders great social utility and find it indispensable in guiding our strategy. Vision Vision answers the question, “What is our longest-term goal as a firm?” Our vision is “to be the best underwriter.” We wanted a vision statement that was memorable, repeatable, and understandable, one that would resonate with our stakeholders, and most importantly with our employees. I believe our vision statement is at the same time aspirational and grounding; aspirational in that it is an enduring vision which requires constant maintenance; grounding in that it serves as a firm guidepost for day-to- day decision making. In every choice at RenaissanceRe, a foundational consideration must be “Does this further our vision of being the best underwriter?” If not, why are we considering it? 4 2021 Annual Report RenaissanceRe Holdings Ltd. Letter to Shareholders