IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

FWD Group Holdings / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/fwd-group-holdings" target="_blank" data-smartkarma-citation="entities:34332:1" rel="noopener">FWD Group Holdings (FWD US)</a> is a Pan-Asia insurer founded in 2013 by Richard Li. FWD is seeking to raise $2 billion through an NYSE IPO at a valuation between $13 billion and $15 billion, according to press reports. FWD has already secured $500 million in pre-deal demand from investors linked to the issuer - Li Ka Shing Foundation ($300 million), <a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a> ($100 million) and PCGI Holdings ($100 million). Athene Life Re, whose assets are managed by Apollo Global Management, has agreed to purchase shares worth $400 million in a concurrent private placement. </p><p>As a relatively young insurer, FWD has built its market position as a Pan-Asian insurer through both organic growth and strategic acquisitions across Asia. FWD was the fastest-growing Pan-Asian life insurer in the past five years, according to NMG. In the short term, the outbreak of the Delta variant may impact the results. In the long-term, FWD’s compelling customer propositions and multi-channel distribution across different geographies within Asia will likely support further market share gains. </p><div class="content-highlight"><p>FWD notes that there remains significant potential for cross-selling and up-selling to its millennial customers (59% of organic new individual policyholders in 1H21) as they advance through different life stages and gain spending power. On balance, we think that FWD has sufficient headroom to continue to gain market share while improving profitability. </p></div>

FWD Group Holdings (FWD US) is a Pan-Asia insurer founded in 2013 by Richard Li. FWD is seeking to raise $2 billion through an NYSE IPO at a valuation between $13 billion and $15 billion, according to press reports. FWD has already secured $500 million in pre-deal demand from investors linked to the issuer - Li Ka Shing Foundation ($300 million), PCCW Ltd (8 HK) ($100 million) and PCGI Holdings ($100 million). Athene Life Re, whose assets are managed by Apollo Global Management, has agreed to purchase shares worth $400 million in a concurrent private placement. As a relatively young insurer, FWD has built its market position as a Pan-Asian insurer through both organic growth and strategic acquisitions across Asia. FWD was the fastest-growing Pan-Asian life insurer in the past five years, according to NMG. In the short term, the outbreak of the Delta variant may impact the results. In the long-term, FWD’s compelling customer propositions and multi-channel distribution across different geographies within Asia will likely support further market share gains. FWD notes that there remains significant potential for cross-selling and up-selling to its millennial customers (59% of organic new individual policyholders in 1H21) as they advance through different life stages and gain spending power. On balance, we think that FWD has sufficient headroom to continue to gain market share while improving profitability. 

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<div><p>FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. </p></div><div><p>FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.</p></div><div>In our previous note, we spoke about the positive aspects of the deal, <a href="https://www.smartkarma.com/insights/fwd-pre-ipo-the-positives-growing-fast" target="_blank" rel="noopener">FWD Pre-IPO - The Positives - Growing Fast</a>.</div><div></div><div>In this note we will talk about some of the not so pleasant aspects. </div>

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.In our previous note, we spoke about the positive aspects of the deal, FWD Pre-IPO - The Positives - Growing Fast.In this note we will talk about some of the not so pleasant aspects. 

FWD Pre-IPO - The Negatives - Strategy Remains Unclear

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<p>Over 50% of allocations are in the US with the bulk of the remainder split between Japan, China &amp; HK and the major European nations.  The EMEA overweight is comprised mainly of the UK, Netherlands, France and Germany, with active managers running underweights in the US, China &amp; HK, Australia and Japan.</p><p>UK allocations hover around their lowest levels in history, though managers remain stubbornly overweight compared to the MSCI AC World index.  A total of 62% of managers are overweight the UK at an average +1.88% above benchmark.  Global Value investors are approaching their largest ever overweight in UK stocks of 3.64% above benchmark.</p><p>Another month, another slump in Japan exposure.  Average weights in Japan stand at an all-time low of 5.06% with 85.5% of funds exposed (another low). <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony Corp (6758 JP)</a> and <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a> are the most widely held stocks, with 23% and 21% of funds holding a position.</p><p>Tech exposure is at record highs, though this is matched by a record underweight of -0.47%.  Indeed, the percentage of funds who are overweight technology has fallen to below 50% for the first time since the end of 2018, a sign that Global managers are tilting their portfolios away from Tech.</p><p>German Industrials allocations have hit a 4-year high as more Global investors add exposure to the sector. <a href="https://www.smartkarma.com/entities/deutsche-post-ag" target="_blank" data-smartkarma-citation="entities:21608:1" rel="noopener">Deutsche Post AG (DPW GR)</a> and <a href="https://www.smartkarma.com/entities/siemens-ag" target="_blank" data-smartkarma-citation="entities:21713:1" rel="noopener">Siemens AG (SIE GR)</a> were the key stocks behind the move, with 4.2% and 2.4% of funds adding exposure over the last 6-months.</p><p>Alibaba has seen closures by some of the larger holders in our analysis, led by American Funds Capital World Fund (-$1.1bn) and New Economy Fund (-$451m).  Though closures have dominated, selected funds have opened exposure during this period of volatility, including Invesco's Global Focus Fund and Liontrust's Global Income Fund.</p>

Over 50% of allocations are in the US with the bulk of the remainder split between Japan, China &amp; HK and the major European nations.  The EMEA overweight is comprised mainly of the UK, Netherlands, France and Germany, with active managers running underweights in the US, China &amp; HK, Australia and Japan.UK allocations hover around their lowest levels in history, though managers remain stubbornly overweight compared to the MSCI AC World index.  A total of 62% of managers are overweight the UK at an average +1.88% above benchmark.  Global Value investors are approaching their largest ever overweight in UK stocks of 3.64% above benchmark.Another month, another slump in Japan exposure.  Average weights in Japan stand at an all-time low of 5.06% with 85.5% of funds exposed (another low). Sony Corp (6758 JP) and KDDI Corp (9433 JP) are the most widely held stocks, with 23% and 21% of funds holding a position.Tech exposure is at record highs, though this is matched by a record underweight of -0.47%.  Indeed, the percentage of funds who are overweight technology has fallen to below 50% for the first time since the end of 2018, a sign that Global managers are tilting their portfolios away from Tech.German Industrials allocations have hit a 4-year high as more Global investors add exposure to the sector. Deutsche Post AG (DPW GR) and Siemens AG (SIE GR) were the key stocks behind the move, with 4.2% and 2.4% of funds adding exposure over the last 6-months.Alibaba has seen closures by some of the larger holders in our analysis, led by American Funds Capital World Fund (-$1.1bn) and New Economy Fund (-$451m).  Though closures have dominated, selected funds have opened exposure during this period of volatility, including Invesco's Global Focus Fund and Liontrust's Global Income Fund.

Global Fund Positioning Update:  Japan Lows, US Highs, UK Value Rotation, Tencent & Alibaba Exit

<p>FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. </p><p>FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.</p><p>In this note, we will talk about the positive aspects of the deal.</p>

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.In this note, we will talk about the positive aspects of the deal.

FWD Pre-IPO - The Positives - Growing Fast

<p>Prudential aims to raise around US$2.8bn via an international and public offering in Hong Kong. The deal has been in the pipeline for a while and hence, is very well flagged.</p><p>In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</p>

Prudential aims to raise around US$2.8bn via an international and public offering in Hong Kong. The deal has been in the pipeline for a while and hence, is very well flagged.In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Prudential Hong Kong Offering - Well Flagged Pivot to Asia, Mind the Liquidity Gap

Hong Kong

AIA Group Limited offers insurance and financial services. The Company writes life insurance for individuals, businesses, accident, and health insurance, as well as retirement planning and wealth management services.

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AIA Group Ltd (1299 HK)

FWD Group IPO: Forward March

FWD is seeking to raise $2 bn through an NYSE IPO at a valuation between $13-15 bn, according to press reports. FWD has sufficient headroom to...

Arun George

FWD Pre-IPO - The Negatives - Strategy Remains Unclear

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. In this note, we will talk about the not so pleasant...

Sumeet Singh

Global Fund Positioning Update: Japan Lows, US Highs, UK Value Rotation, Tencent & Alibaba Exit

A detailed look at investor positioning among 380 active Global strategies, covering the major themes in country, sector and stock exposure.

Steven Holden

FWD Pre-IPO - The Positives - Growing Fast

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. In this note, we will talk about the positive...

Sumeet Singh

Prudential Hong Kong Offering - Well Flagged Pivot to Asia, Mind the Liquidity Gap

Prudential aims to raise around US$2.8bn via an international and public offering in Hong Kong. The deal has been in the pipeline for a while.

Sumeet Singh

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