Australia makes up just 2% of the global economy, so for companies looking to grow into a large market, it’s natural to look offshore. But following the challenges faced by NAB or Slater & Gordon in their attempts to move offshore, it's hard to blame investors for being cautious about Australian companies expanding overseas. Tim Samway, Managing Director at Hyperion Asset Management, says that the vast majority of the stocks in their Australian portfolio derive most of their income offshore. In his view, large acquisitions are not the way to move offshore.
“We’re looking for businesses that are disruptors, that can get a first-mover advantage – even REA sold its Italian business because it wasn’t the first-mover.”
In the video below, he identifies two attributes to avoid and two attributes to look for in a company moving beyond our shores.