TCW Relative Value Mid Cap Fund Believes RenaissanceRe Holdings (RNR) Will Appreciate Over Time. Here’s Why

TCW funds, an investment management company, released its “TCW Relative Value Mid Cap Fundsecond-quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter started with a sharp decline driven by the Liberation Day tariffs announcement by President Trump, but a 90-day pause on certain tariffs led to a strong recovery, propelling the S&P 500 and Nasdaq to new highs. U.S. equities continued to rise in May and June, supported by better-than-expected corporate results and positive jobs reports. Against this backdrop, the fund (I share) returned 7.37% in the quarter compared to 5.35% for the Russell Midcap® Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, TCW Relative Value Mid Cap Fund highlighted stocks such as RenaissanceRe Holdings Ltd. (NYSE:RNR). RenaissanceRe Holdings Ltd. (NYSE:RNR) is a reinsurance and insurance products provider. The one-month return of RenaissanceRe Holdings Ltd. (NYSE:RNR) was 6.27%, and its shares lost 8.56% of their value over the last 52 weeks. On October 2, 2025, RenaissanceRe Holdings Ltd. (NYSE:RNR) stock closed at $255.75 per share, with a market capitalization of $12.037 billion.

TCW Relative Value Mid Cap Fund stated the following regarding RenaissanceRe Holdings Ltd. (NYSE:RNR) in its second quarter 2025 investor letter:

“RenaissanceRe Holdings Ltd. (NYSE:RNR), headquartered in Hamilton, Bermuda, is a property & casualty reinsurer with nearly $10 billion of net written premiums in 2024. At initiation, the stock had a market capitalization of $11.7 billion and meets all valuation factors save for dividend yield. The company has compounded book value at best-in-class 13.5% CAGR since its IPO in 1995 and has a history of conservative underwriting. The primary catalyst is restructuring as it integrates the acquisition of Validus Re which closed in late 2023 from AIG. In contrast to RenaissanceRe, Validus often found itself with deficient reserves, but with the more conservative new parent re-underwriting its policies, Validus’ margin and profitability should appreciate over time. Reinsurance premium pricing remains flat to modestly down but still at attractive margins even as catastrophe exposure has likely declined in percent terms as the company has grown. RNR’s reserves could be redundant by as much as $12 per share which eventually should add to its book value. With improved cashflows from the Validus Re acquisition and the potential for book value accretion, the stock should appreciate over time.”

Is RenaissanceRe Holdings Ltd. (RNR) High Growth Financial Stock To Invest In?

RenaissanceRe Holdings Ltd. (NYSE:RNR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 33 hedge fund portfolios held RenaissanceRe Holdings Ltd. (NYSE:RNR) at the end of the second quarter, down from 40 in the previous quarter.  While we acknowledge the risk and potential of RenaissanceRe Holdings Ltd. (NYSE:RNR) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RenaissanceRe Holdings Ltd. (NYSE:RNR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered RenaissanceRe Holdings Ltd. (NYSE:RNR) and shared the list of most undervalued stocks to buy and hold for 3 years. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.