FWD Group ready to ramp up infra exposure

The $24.4bn Hong Kong-based insurer will be looking for partners over the next 12 months, as it eyes investments across the capital stack.

FWD Group, the insurance business of Hong Kong-based investment firm Pacific Century Group, is considering ramping up its infrastructure exposure, chief investment officer Paul Carrett told Infrastructure Investor.

The Asian insurer is open to infrastructure investments across the capital stack in projects that are fundamentally needed by local communities, if it “makes sense from an investment perspective”, said Carrett, who joined the insurance company 12 months ago.

Carrett declined to disclose the company’s allocation to infrastructure, but noted that the majority of FWD’s $24.4 billion asset portfolio is invested in public markets, with a small exposure to infrastructure debt.

“We like infrastructure as an asset class in a broad sense,” said Carrett, adding that opportunities in infrastructure-related areas – such as the real estate and essential services that come with a railway project, for example – would also be of interest to the insurer.

However, he highlighted one of the dilemmas investors face today is a crowded investment environment with lots of liquidity, particularly in mature markets.

“We are familiar with the Asian jurisdictions and we have business here. This is our backyard,” said Carrett. “If we find managers with compelling stories and access to Asian infrastructure, including greenfield opportunities, I would certainly listen to that. We would play in a less crowded space, but again, the risk allocation and the returns have to be right for all parties.”

Carrett said FWD is open to collaboration with prospective partners. “Over the next 12 months, we will be speaking with potential partners, including developers, fund managers and consultants before making any final investment decisions,” he said.

Established in 2013, the Asian insurer runs life, medical and general insurance businesses in Hong Kong and Macau, Japan and across Southeast Asia.