Mubadala Capital, T&D said to be cornerstone investors in FWD IPO

Mubadala Capital and Japan’s T&D Holdings Inc. are set to be cornerstone investors in insurer FWD Group Holdings Ltd.’s initial public offering in Hong Kong, according to people familiar with the matter.

FWD, controlled by billionaire Richard Li, may have a valuation of about $6 billion, the people said, asking not to be identified discussing confidential information. There’s enough preliminary interest from investors to cover the books nearly two times ahead of the official launch, the people said.

The IPO is expected to raise about $500 million, the people said, adding that books are expected to open as soon as Thursday. Deliberations are ongoing and plans may still change, they said.

Representatives for FWD and Abu Dhabi’s sovereign wealth fund Mubadala Investment Co., the majority owner of alternative asset manager Mubadala Capital, declined to comment. T&D didn’t immediately respond to a request seeking comment.

FWD dropped previous attempts for bigger IPOs in Hong Kong and New York, which it initially targeted for a $3 billion listing in 2021, raising capital via private placements instead.

Market conditions have turned more favorable as Hong Kong experiences a revival in first-time share sales, led by mainland China-traded companies seeking second listings. They include battery maker Contemporary Amperex Technology Co. Ltd., which raised more than $5 billion in May in the world’s largest market debut so far this year.

Hong Kong’s Hang Seng Index has climbed 35% over the past 12 months.

Morgan Stanley and Goldman Sachs Group Inc. are joint sponsors for FWD’s IPO, while HSBC Holdings Plc is the financial adviser, according to the insurer’s prospectus.

Li, the son of high-profile Hong Kong tycoon Li Ka-shing, founded FWD in 2013 and has expanded into other Asia markets including Japan, Singapore and Thailand. His investment firm Pacific Century Group is majority shareholder. 

FWD reported $24 million of net income after tax in 2024, its first full year of profitability under new IFRS 17 accounting standards, as well as its first positive operating cashflow. The new business contractual service margin climbed 55% in the first quarter from the same year-earlier period.

While valuations of insurance companies including AIA Group Ltd. and Prudential Plc have bounced back significantly this year, they’re still significantly lower than in 2021.