Richard Li’s FWD insurance group targeting up to US$3 billion from US IPO as early as September, says source
- Hong Kong-based FWD is preparing to raise up to US$3 billion from a US IPO as early as next month, says source. Deal will value insurer at some US$13 billion
- FWD could be the largest insurer from China or Hong Kong to list in the US since China Life’s US$3.5 billion IPO in 2003
HSBC, JPMorgan, Morgan Stanley, and Goldman Sachs are leading the share sale. JPMorgan did not immediately have a comment, while HSBC and Goldman declined to comment on Tuesday. Morgan Stanley did not immediately respond to a request for comment.
An FWD spokesman declined to comment on the IPO details on Tuesday.
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If successful, FWD’s listing will be the biggest US flotation by a Hong Kong-based insurer, according to data provider Refinitiv. It will also be the largest IPO by an insurer headquartered in China or Hong Kong since China Life Insurance raised US$3.5 billion on the New York Stock Exchange in December 2003.
Tom Chan Pak-lam, chairman of Hong Kong Institute of Securities Dealers, a local brokerage industry body, said that China’s regulatory crackdown will not have an impact on FWD’s upcoming IPO as it is as a Hong Kong insurance company and not a mainland technology company.
In July, only one issuer from China – Sentage Holdings – listed in the US, raising US$20 million, compared with nine deals that mopped up US$7.6 billion in June, Refinitiv data showed.
“For now, investors are sitting on the sidelines as they await further clarity on future regulatory directions from China and see how future listings could be affected,” said a Hong Kong-based banker.
Market liquidity for IPOs remains strong, he added.
Another source said that FWD preferred to list in the US over Hong Kong because it wanted to list as a weighted voting rights (WVR) company.
In Hong Kong, only technology and innovative firms qualify for WVR listings, while FWD is seen by Hong Kong regulators as an insurance company, effectively ruling it out as a WVR company.
FWD is the insurance arm of Pacific Century Group, the sprawling investment group of Richard Li, the younger son of tycoon Li Ka-shing. The insurer had 9.8 million customers, 6,100 employees and US$62.6 billion in assets as of December last year, according to its website.
In China, where FWD Group maintains a representative office in Shanghai, it has applied to set up a joint venture as it eyes the world’s second-largest insurance market. China’s insurance market is expected to quadruple to US$2.36 trillion by 2032 and overtake the US along the way, according to Swiss Re.
The insurer has been expanding aggressively in Asia through acquisitions, and a US IPO could provide FWD with more capital as it looks to strike more deals and acquire more licences that will enhance its distribution and scale in markets.
FWD has a presence in Hong Kong, Macau, Thailand, Indonesia, the Philippines, Singapore, Vietnam, Japan, Cambodia and Malaysia.