Ara Partners’ Raise $3 Billion for Industrial Decarbonization, Targeting Carbon Cuts and Growth
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Oversubscribed Third Private Equity Fund Closed at $2.8 Billion Hard Cap, Alongside Dedicated LP Co-Investment Vehicles
Fund Focuses on Buyout and Growth Investments in Industrial Decarbonization Sector
Ara Partners (“Ara” or the “Firm”), a leading private equity and infrastructure investment firm specializing in industrial decarbonization, announced that it has closed over $3 billion of new capital commitments. The Firm has concluded a successful fundraising for Ara Fund III (“Fund III” or the “Fund”), closing on $2.8 billion of limited partner commitments, alongside dedicated limited partner co-investment vehicles.
The Fund was significantly oversubscribed at an increased hard cap, exceeding its $2 billion initial target, and received the support of Ara’s existing investor base and a diverse set of new institutional investors comprised of pension funds, insurance companies, sovereign wealth funds, endowments, and foundations from North America, Europe, and the Asia-Pacific region.
Fund III will continue Ara’s strategy of investing in the decarbonization of the industrial economy, the greatest source of carbon emissions globally. Leveraging significant technical and operations expertise, the Fund will pursue both buyout and growth investments in industrial companies primarily headquartered in the United States, Canada and Europe that have the potential to achieve reductions in carbon emissions across sectors, including industrial and manufacturing, chemicals and materials, energy efficiency and green fuels, and food and agriculture. Ara’s predecessor fund, Ara Fund II, closed in September 2021 at approximately $1.1 billion, above its $650 million target. Ara has total assets under management of approximately $5.6 billion.
“We are grateful for the extraordinary interest in Fund III demonstrated by Ara’s increasingly global, blue-chip investor base,” said Charles Cherington, Managing Partner of Ara. “The strong support from new and existing investors, is a testament to their confidence in our talented team, our investment strategy, and the compelling opportunities in the industrial decarbonization sector. We look forward to collaborating with our world-class portfolio company management teams to generate strong returns for our investors in the coming years.“
Fund III has already completed four investments: Vacuumschmelze, a leading global producer of advanced magnetic materials and the largest producer of rare earth permanent magnets in the Western Hemisphere; Genera, a sustainable pulp and packaging producer; CFP Energy, which provides market-facing solutions in environmental and green energy products to industrial customers across Europe; and CycleØ, a fully integrated developer of distributed biomethane facilities.
“The growing, global presence of Ara’s platform and portfolio directly reflects the industrial economy’s continued demand for the technological innovation and infrastructure needed to decarbonize,” said Troy Thacker, Managing Partner of Ara. “The support we have received for Fund III will enable the Ara team to continue investing in high-growth companies globally that are positioned to build value while achieving positive environmental impacts.“
Mr. Cherington and Mr. Thacker founded Ara in 2017. Ara’s experienced investment team also includes Partners Chris Picotte, Cory Steffek, and Tuan Tran, as well as Teresa O’Flynn and Churchill George Yong, Co-Heads of the Firm’s infrastructure strategy. The investment team operates from offices in Houston, Boston, and Dublin, and is supported by a deep bench of operating professionals with experience across industries.
Rede Partners acted as placement agent, and Debevoise & Plimpton LLP served as legal counsel in the formation of Fund III.