Billionaire Li’s FWD Weighing Pre-IPO Round as Listings Slow, Sources Say

Manuel Baigorri, Bloomberg News

An FWD Group Holdings Ltd. store in Hong Kong, China, on Tuesday, March 1, 2022. FWD Group, the Asian insurer backed by Hong Kong billionaire Richard Li, filed an application for an initial public offering in the city, after U.S.-China tensions scuppered more ambitious plans for an overseas debut. , Bloomberg

(Bloomberg) -- FWD Group Holdings Ltd. is weighing a private funding round as the Asian insurer’s long-planned initial public offering is set to be delayed again amid weak market conditions, according to people familiar with the matter.

Hong Kong billionaire Richard Li’s firm has about $800 million in commitments for a pre-IPO round that could take place as early as June, the people said, asking not to be identified as the information isn’t public. FWD is contemplating the round in lieu of proceeding in the near term with an IPO in the Asian financial hub, given the performance of recent first-time share sales, the people said.

The size of the pre-IPO round hasn’t been confirmed and they could raise more than the initial committed amount, the people said. FWD still plans to move ahead with an IPO when the market improves, they said.

FWD’s group chief financial officer Jon Nielsen is leaving and will join Canadian insurer Great-West Lifeco Inc. as its CFO-designate in September, according to a statement Friday. Bloomberg News reported Nielsen’s planned departure earlier. FWD has identified a potential replacement with experience in corporate finance at a major US insurer, the people said.

Separately, Li’s investment flagship Pacific Century Group is set to name Magnus Andersson, former co-head of Asia Pacific equity capital markets at Morgan Stanley, as an executive director, the people said. Andersson would help FWD prepare for a potential IPO, and could join PCG as soon as June, the people added. He retired from the US bank in February.

A new funding round would add to the $1.8 billion that FWD has raised in private placements over the past two years. The firm has repeatedly explored the IPO market in that time without proceeding with a first-time share sale.

FWD has filed for a Hong Kong listing three times, most recently in March, and had been targeting a debut as soon as the second quarter to raise as much as $1 billion, Bloomberg News has reported. Before that, the firm had abandoned a New York listing plan that could have raised as much as $3 billion in 2021, people familiar with the matter have said.

Deliberations about the fundraising, IPO plans and staff changes are ongoing and details may change, the people said. A representative for FWD declined to comment, while Andersson didn’t immediately respond to a request for comment via LinkedIn. A Pacific Century Group spokesperson declined to comment on Andersson’s appointment.

Hong Kong has seen a dearth of larger listings this year amid a global drought for IPOs. Volumes in the financial hub are down 23% in the year to date, according to data compiled by Bloomberg, and the city’s biggest first-time share sale so far, baijiu maker ZJLD Group Inc., saw its shares tumble nearly 18% on their first day of trading.

Founded 10 years ago, the insurer has expanded across Asia both organically and via acquisitions. It counts more than 10 million customers across markets in the region. Full year adjusted operating profit before tax rose 83% to $334 million, it said in an exchange filing on Feb. 28.

(Updates with announcement of Nielsen’s new job in fourth paragraph.)