FWD IPO Delayed

FWD Group Holdings Ltd - initial public offering of his Asian insurance group in US is stalling amid regulators’ increasing unease over the long arm of the Chinese government. The acquisitive insurer so far hasn’t been able to secure final approval from the U.S. Securities and Exchange Commission for the listing. The SEC has been asking the company about risks such as whether the Chinese government could extend its authority to Hong Kong-based firms like FWD.

The IPO was expected to raise about $2 billion to $3 billion. FWD was earlier targeting to start trading in New York this week. While it hasn’t formally withdrawn its share sale plans, the listing looks increasingly unlikely to be completed this year. 

The insurer has also faced pushback from some investors on concerns about the regulatory risks and valuation. Investors have shunned Chinese companies’ U.S. listings after ride-hailing giant Didi Global Inc. was slapped with a regulatory probe and banned from adding new customers just days after its IPO. The crackdown sparked a rout that wiped about $1 trillion globally off Chinese companies’ shares.

It remains unclear whether Beijing’s subsequent proposals, such as tightening rules for companies listing overseas, will be extended to Hong Kong companies. In July, the Biden administration issued an advisory saying that some business risks that were formerly limited to mainland China are increasingly a concern in the Asian financial hub.


FWD was started in 2013 by Li, a Hong Kong tycoon who also runs PCCW Ltd., one of the city’s major telecom companies. The Asian insurer’s existing investors include Swiss Re AG and Fang Fenglei, the Chinese dealmaker who started private equity firm Hopu Investment Management.

The company could revive its plans to list in New York at a later date if it receives regulatory clearance. It could also opt to sell shares in a different market like Hong Kong or raise funds through other methods, like a stake sale.

FWD had $62.5 billion in total assets at the end of June, according to its IPO filings. Over the past few years, it has expanded to 10 markets across Southeast Asia, Hong Kong, Macau and Japan.

Athene Life Re Ltd., an affiliate of private equity firm Apollo Global Management Inc., had agreed to buy $400 million of FWD stock in a private placement at the same time as the IPO. Athene and Apollo would also manage part of FWD’s investment portfolio as part of a strategic partnership, the prospectus shows.

PCCW and Li’s holding company Pacific Century Group had both expressed interest in investing as much as $100 million in FWD’s share sale. The Li Ka Shing Foundation, a charity started by Li’s father, was set to invest as much as $300 million.

FWD swung to a net profit of $205 million in the first half of the year, from a net loss of $318 million during the same period in 2020. Revenue rose 53% to $6 billion, according to the company’s prospectus.