Pacific Century Group downplays FWD stake sale, says IPO will come at ‘opportune time’

FWD Group Holdings, a Hong Kong-based insurance business controlled by billionaire Richard Li Tzar-kai, said Li would maintain his control of the company amid speculation it was considering a potential stake sale worth over US$10 billion after a delayed initial public offering (IPO).

FWD’s parent company Pacific Century Group issued a statement on Sunday saying it would “not comment on market speculation,” adding that Li will maintain his control of FWD and that he was “confident about the long-term development of the company”.

The Asia-based private investment company said FWD has achieved an average annual growth rate of over 23 per cent during the past 10 years in terms of value of new business, a measure of the present value of future profits from policies issued during a period.

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Pacific Century Group said it understands FWD’s IPO timeline is of great interest to the market, noting that the subsidiary should “always evaluate the timing to go public in a holistic manner, in addition to assessing the market environment”.

The parent company also said that “a premature IPO without foreseeable benefits” would negatively impact FWD’s valuation, but that an IPO remains an option for the company’s development.

It added that it will seek out an “opportune moment” to list the company, with the goal of maximising shareholders’ interests.

The statement came after FWD was reportedly considering a stake sale earlier this month at a valuation of more than US$10 billion, after its US$1 billion Hong Kong IPO plan was delayed for the second time last September.

Global insurance companies, including Toronto-based Sun Life Financial, were reportedly in talks with FWD for a potential tie-up. Should a deal materialise, FWD could use the proceeds to lower its debt load and boost profitability, Bloomberg reported, citing people familiar with the matter.

Founded in 2013 by Li, FWD has attempted to go public three times in Hong Kong, most recently in March 2023. The company also ditched an IPO plan in New York in 2021.

With over 11 million customers across 10 markets, the company is currently controlled by Li through Pacific Century Group. Other backers of FWD include Zurich-headquartered reinsurer Swiss Re and New York-headquartered private equity firm Apollo Global Management. FWD has raised over US$1.83 billion in private placements in 2021 and 2022, according to its website.