Hong Kong tycoon Richard Li's insurer FWD files for long-awaited US IPO

FWD manages US$62.5 billion in total assets, according to the filing with the US Securities and Exchange Commission.
FWD manages US$62.5 billion in total assets, according to the filing with the US Securities and Exchange Commission.ST PHOTO: KUA CHEE SIONG

HONG KONG (BLOOMBERG) - FWD, the acquisitive Asian insurer backed by billionaire Richard Li, filed on Thursday (Sept 23) to go public in the United States, confirming an earlier Bloomberg News report.

The Hong Kong-based company listed the size of the offering as US$100 million (S$134.8 million), a placeholder that will likely change when the proposed terms of the share sale are set.

FWD could seek to raise about US$2 billion to US$3 billion based on initial investor feedback, said sources with knowledge of the matter who asked not to be identified because it was private.

The insurer aims to sell shares in the fourth quarter, the sources said. Details such as the timing and the final size of the offering could change based on market conditions, they said. A representative for FWD declined to comment.

FWD manages US$62.5 billion in total assets, according to the filing with the US Securities and Exchange Commission.

FWD disclosed that Athene Life Re, part of private equity firm Apollo Global Management, has agreed to buy US$400 million worth of its Class A share in a concurrent private placement.

Athene and Apollo will also manage part of FWD's investment portfolio as part of a strategic partnership with an initial term of five years, the prospectus shows.

Other investors also have indicated interest in a combined total of up to US$500 million worth of the American depository shares, FWD said.

That includes a US$300 million commitment from Li Ka Shing Foundation, a charitable foundation of Mr Li's father; US$100 million from PCCW, a Hong Kong telecommunications company backed by Mr Li; and US$100 million from PCGI Holdings, Mr Li's other holding company.

PCGI is the biggest shareholder of FWD, with a 73 per cent stake prior to the initial public offering. Swiss Re and an investment vehicle controlled by Mr Li, and Hopu Investment Management chairman Fang Fenglei each own about 11 per cent of the company.

FWD said in June it had filed confidentially for the long-awaited listing. New business value, a key gauge of profitability, rose 24 per cent last year to US$617 million, according to a separate statement to the Hong Kong exchange at the time.

The company swung to profitable territory during the first six months of the year, showing net profit of US$205 million on revenue of US$6 billion, according to the filing. That compared with a net loss of US$318 million on revenue of US$3.9 billion during the same period last year.