Richard Li's insurer FWD files for long-awaited IPO

[HONG KONG] FWD Group Holdings, the acquisitive Asian insurer backed by billionaire Richard Li, filed on Thursday to go public in the US.

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

The filing confirmed an earlier Bloomberg News report that FWD was preparing to unveil its first public filing for the initial public offering this week.

FWD could seek to raise about US$2 billion to US$3 billion based on initial investor feedback, said people 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 people said.

Details such as the timing and the final size of the offering could change based on market conditions, the people 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.

Founded in 2013 by Mr Li, it has expanded to 10 markets across Southeast Asia, Hong Kong, Macau and Japan, from three at inception.

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 shares 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 the Li Ka Shing Foundation, a charitable foundation of Mr Li's father; US$100 million from PCCW, a Hong Kong telecom 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 IPO. 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. Southeast Asia contributed to more than 40 per cent of that amount.

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.

BLOOMBERG