The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Hudson Lockett

HONG KONG, May 20 (Reuters Breakingviews) - Conditions are not ideal for FWD's long-delayed listing, but then they never have been. After several runs at an initial public offering in New York and Hong Kong, the insurer founded by tycoon Richard Li once again filed a listing application on Monday to sell shares in the Asian financial hub — and this one will probably stick, albeit on a far smaller scale than once envisioned.

That’s because the company aiming for public markets has changed substantially since it first eyed an IPO in 2021, and that alters the calculus for Li, his company, and especially longtime backers. Those who have stepped up to fund the company through private rounds, including the likes of Swiss Re and Apollo Management, may be happy just to get the thing listed to lay down a path for a future exit.

FWD was once a growth play on Southeast Asian markets being abandoned by western players. Now it is a more seasoned insurer with investment-grade ratings from Fitch and Moody’s which last year reported its first net profit and is generating cash under new global accounting standards. FWD’s contractual service margin for new business, a forward-looking indicator for profits, also rose 55% in the first quarter.

But listing a maturing business amid market anxiety over U.S. tariffs set to hammer Asian exporters is inevitably a harder sell — hence expectations FWD will raise several hundred million dollars, per unnamed sources cited by Bloomberg, rather than the $3 billion targeted in 2021. The performance of the insurer’s listed peers in recent years suggests valuation could also come in lower than hoped.

The $9 billion FWD valuation notched up during its last major fundraising in late 2021 and early 2022 represented around 1.5 times its embedded value in 2022, a small discount to AIA’s 1299.HK multiple at the time. If the company lists today at the same 1.2 times multiple its peer now commands, FWD would be raising funds in a down round.

That may help to explain why, according to a person familiar with the situation, existing investors do not plan to sell their shares during the debut. To get the deal done and secure long term investors, Li also may be happy to settle for a substantial discount to AIA and its other main listed peer Prudential PRU.L.

Li and his backers will be better positioned to capture any upside once the listing is through. A swift share sale before trade war tensions worsen again looks wise as well. It may not be a perfect ending to FWD’s IPO saga, but it would be an ending. That might be enough.

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CONTEXT NEWS

Asian insurer FWD on May 19 said it had refiled its listing application with the Hong Kong stock exchange. It is the company's fifth attempt at an initial public offering. FWD was founded in 2013 by Richard Li.

The company could seek several hundred million dollars from the deal, Bloomberg reported citing unnamed people familiar with the matter.

(Editing by Una Galani; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on LOCKETT/ hudson.lockett@thomsonreuters.com))