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Tycoon Richard Li’s Insurer FWD Files for Long-Awaited IPO

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(Bloomberg) -- FWD Group Holdings Ltd., the acquisitive Asian insurer backed by billionaire Richard Li, filed on Thursday to go public in the U.S.

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The Hong Kong-based company listed the size of the offering as $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 $2 billion to $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 $62.5 billion in total assets, according to the filing with the U.S. Securities and Exchange Commission. Founded in 2013 by 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 Ltd., part of private equity firm Apollo Global Management Inc., has agreed to buy $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.

Fresh Backing

Other investors also have indicated interest in a combined total of up to $500 million worth of the American depository shares, FWD said.

That includes a $300 million commitment from the Li Ka Shing Foundation, a charitable foundation of Li’s father; $100 million from PCCW Ltd., a Hong Kong telecom company backed by Li; and $100 million from PCGI Holdings Ltd., Li’s other holding company.

PCGI is the biggest shareholder of FWD with a 73% stake prior to the IPO. Swiss Re Ltd. and an investment vehicle controlled by Li and Hopu Investment Management Chairman Fang Fenglei each own about 11% 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% last year to $617 million, according to a separate statement to the Hong Kong exchange at the time. Southeast Asia contributed to more than 40% of that amount.

The company swung to profitable territory during the first six months of the year, showing net profit of $205 million on revenue of $6 billion, according to the filing. That compared with a net loss of $318 million on revenue of $3.9 billion during the same period last year.

Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co., HSBC Holdings Plc and CMB International Capital Ltd. are arranging the offering. The company will list on the New York Stock Exchange under the symbol FWD.

(Updates with other IPO arrangers in last paragraph)

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