GREENLIGHT CAPITAL RE LTD

3. INVESTMENT IN RELATED PARTY INVESTMENT FUND

The Company has entered into the Second Amended and Restated Exempted Limited Partnership Agreement (the “Solasglas LPA”) of Solasglas Investments, LP (“Solasglas”), as amended from time to time, with DME Advisors II, LLC (“DME II”), as General Partner, Greenlight Re, and GRIL, (together, the “GLRE Limited Partners”). Effective January 1, 2023, the Company increased the maximum Investment Portfolio to 60% of GLRE Surplus from 50% , as defined in the Solasglas LPA, which was further increased to 70% on August 1, 2024.

Solasglas has entered into a Solasglas investment advisory agreement (“IAA”) with DME Advisors. LP (“DME Advisors”), pursuant to which DME Advisors is the investment manager for Solasglas. DME II and DME Advisors are related to the Company, and each is an affiliate of David Einhorn, Chairman of the Company’s Board of Directors (the “Chairman”).

The Company has concluded that Solasglas qualifies as a variable interest entity (“VIE”) under U.S. GAAP. In assessing its interest in Solasglas, the Company noted the following:

•DME II serves as Solasglas’ general partner and has the power to appoint the investment manager. The Company does not have the power to appoint, change or replace the investment manager or the general partner except “for cause.” Neither of the GLRE Limited Partners can participate in the investment decisions of Solasglas as long as Solasglas adheres to the investment guidelines provided within the Solasglas LPA. For these reasons, the GLRE Limited Partners are not considered to have substantive participating rights or kick-out rights.

•DME II holds an interest in excess of 10% of Solasglas’ net assets, which the Company considers to represent an obligation to absorb losses and a right to receive benefits of Solasglas that are significant to Solasglas.

Consequently, the Company has concluded that DME II’s interests, not the Company’s, meet both the “power” and “benefits” criteria associated with VIE accounting guidance. Therefore DME II is Solasglas’ primary beneficiary. The Company presents its investment in Solasglas in its consolidated balance sheets in the caption “Investment in related party investment fund.”

The Company’s maximum exposure to loss relating to Solasglas is limited to GLRE’s share of Partners’ capital in Solasglas. At December 31, 2024, GLRE’s share of Partners’ capital in Solasglas was $387.1 million (December 31, 2023: $258.9 million), representing 77.9% (December 31, 2023:72.7%) of Solasglas’ total capital. DME II held the remaining 22.1% (December 31, 2023:27.3%) of Solasglas’ total capital. The investment in Solasglas is recorded at the GLRE Limited Partners’ share of Solasglas’ capital as reported by Solasglas’ third-party administrator. The GLRE Limited Partners can redeem their investment from Solasglas for operational purposes by providing 3 business days’ notice to DME II. At December 31, 2024, the majority of Solasglas’ long investments were composed of cash and publicly-traded equity securities, which could be readily liquidated to meet the GLRE Limited Partners’ redemption requests.

The Company’s share of Solasglas’ income from operations for the years ended December 31, 2024, 2023, and 2022, was $33.6 million, $28.7 million, and $54.8 million, respectively, and shown in the caption “Income from investment in related party investment fund” in the Company’s consolidated statements of operations.

At December 31, 2024, the Company’s investment in Solasglas represented 60.9% (December 31, 2023:43.4%) of total shareholders’ equity.

The Company has determined that for its fiscal year ended December 31, 2024, the Company’s investment in Solasglas met at least one of the conditions of a significant subsidiary under SEC’s Regulation S-X, Rule 3-09. Accordingly, the audited financial statements for Solasglas have been attached as an exhibit (Exhibit 99.1) to this Form 10-K.

The summarized financial statements of Solasglas are presented below.

Summarized Statements of Financial Condition of Solasglas Investments, LP

Summarized Statements of Operations of Solasglas Investments, LP

1 The net increase in Partners’ capital is net of management fees and performance allocation presented below:

See Note 15 for further details on management fees and performance allocation.