Established in 1987, TSMC is the world’s first dedicated semiconductor foundry, or semiconductor fabrication (fab) company. As essential components of most electronic devices and circuits, semiconductor chips are the building blocks of connectivity for all industries. In an era of undisputed importance and growth of the internet of things, this company has a leading role in enabling the growth of — and satisfying the demand for — advanced chips and ever-faster computer power by both consumer and industrial end markets. TSMC has extended its dominance during recent years to become the principal partner of the “fabless” chip design companies globally. Also, it has the critical advantage of being independent, and thus, as a brand agnostic chip manufacturer, TSMC constantly thrives on process improvement. With scale and ability to continue to invest in leading-edge manufacturing facilities with unparalleled efficiency and low cost, Impax believes that TSMC is well-positioned to produce solid returns on capital with little or no leverage and excellent financial discipline. Recent sales trends and revenue growth remain positive, demonstrating resilient demand for advanced semiconductors during a pandemic-induced downturn. A robust balance sheet and positive cash flow generation this year could help the company weather current disruptions in the global economy.


Keyence is a high-quality factory automation company focused on customized solutions for production lines. The company’s complex sensors and automation systems improve productivity by making production more efficient, with higher speeds yet fewer defects, waste and energy use. In fact, Keyence can increase the productivity of a production line by as much as 30%. Premium prices for consulting services that include design and engineering expertise help to generate high operating margins and consistent free cash flow. These margins are helped by a direct sales model, high product innovation, and outsourced production. Expanding sales forces in China and especially the United States have grown sales outside Japan from 30% to 50% of total sales during the last few years. New product cycles and cost savings programs have been key, making this company’s business model less cyclical than its peers. End markets are well diversified by industry, from electrical machinery to automotive, semiconductor, machinery and food/pharma. Keyence’s leading-edge sensor, detection and measurement products and systems can capture data quickly and can efficiently feed it to sophisticated control systems for more interactive and “smart” production systems. In the short term, idle factories and the impact of lockdowns on the company’s sales model will have some negative impact. However, Keyence is well positioned to benefit from a COVID-19 related increase in demand for factory automation, as customers seek to adapt their production lines by reducing worker proximity on factory floors. In addition, Keyence may benefit earlier on during the recovery, as customers first focus on productivity improvements before they commit to new capacity expansion.

Kubota Corporation

Kubota is a Japanese company that has dominant market shares in its small-scale farm equipment and PVC water pipe businesses. Although the individual number of farmers is declining in the domestic market, the consolidation of farms and rising demand for more powerful planting and harvesting machines is leading to stable revenue. Kubota is a leading player in rice-related farm equipment in Asia. Demand for high quality and sub-compact equipment should grow in Asia, driven by the growing mechanization of agriculture and the need to plant and farm more efficiently. Kubota is one of the two dominant players in the Japanese PVC water pipe sector. While the company is operating within a mature market, modest growth is anticipated, driven by reconstruction activity and the re-enforced Japan infrastructure works program.

Lonza Group AG

Lonza is a 112-year-old, $30 billion market cap chemicals and contract development  and manufacturing organization company (CDMO) based in Switzerland. The company produces organic fine chemicals, biocides, active ingredients and biotechnology products. Lonza offers custom chemical manufacturing and fermentation processing and manufactures products for the life sciences, pharmaceuticals, food processing and agricultural products industries. Lonza operates production sites in Europe, the United States and China. In recent years, the company has transitioned from a chemicals company to the largest outsourced drug manufacturer, with roughly 80% of revenues stemming from healthcare-related products and 20% from chemicals. Lonza is the largest biologics CDMO with the broadest offerings and longest track record, and is therefore well-positioned to benefit from the structural shift to large molecule drugs. Given its exposure to nearly the entire value chain, Lonza stands to accelerate the development of new biologic drugs and enable biotech and biopharma companies to bring innovative drugs to market faster and at a lower cost.

Thermo Fisher Scientific

Thermo Fisher is one of the leading scientific testing and analysis equipment companies. Testing and analysis is an attractive growth area due to the increased need for air, water and soil pollution and food testing globally. A big player in testing and analysis, Thermo also has various touch points with respect to addressing COVID-19: virus testing, Personal Protective Equipment supply, instrument usage, serology partnerships and equipment deployed for vaccine development. This will help to offset possible near-term slower analytical instrument orders. More broadly, increased pollution regulations — particularly in China — an increasing need for food testing, and demand for tests across various industrial processes is central for efforts to improve and automate performance. Thermo Fisher is an important consolidator in the U.S. industry and able to expand margins through low cost manufacturing, good assets/facility management and cross selling. The company operates in more than 50 countries worldwide. Thermo Fisher has an attractive profile of consistent, relatively predictable growth, a successful track record of appropriate capital allocation, and presents several interesting growth opportunities within healthcare products.


Ecolab is a market leader in water optimization, efficiency and hygiene solutions across many end markets including hospitals, schools, governments, restaurants and industrial businesses. Ecolab has the biggest market share among competitors in food safety and ranks second in water efficiency products. The global need for improved water efficiency, water testing and water treatment has never been greater. Ecolab sells chemicals, products and systems to help preserve, re-use and optimize water usage. A strong management team has led the growth of the company from a U.S.-centric business to a leading global player across a broad array of end markets in a fragmented industry. The company has a strong focus on innovation and its business model is built on deep understanding of customer needs and providing solutions that drive customer savings despite Ecolab’s premium price point. Ecolab benefits from a high stream of recurrent earnings, which together with the high margins drives strong cashflow. Customer penetration rates are rising, and the company is gaining market share. This potentially offers excellent growth opportunities.

Pax Global Opportunities Fund Top 10 Holdings

(As of 03/31/2021)
Holdings are subject to change.

This information is not a recommendation to buy or sell any security.


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