Ara Partners closes debut fund on $400m

Alessia Argentieri
07 May 2020

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Ara Partners, a Houston-based private equity firm specialising in industrial decarbonisation investments, has closed its inaugural fund, Ara Fund I, on $400m.

Ara Partners was co-founded by veteran investors Charles Cherington and Troy Thacker in 2017. Ara Fund I will focus on how the demands of the industrial sector can be met by low-carbon offerings.

Atlantic-Pacific Capital served as the fund's placement agent and Foley & Lardner provided legal counsel.

"We look forward to backing technology-rich companies that reduce industrial emissions while targeting excellent returns for investors," said Ara Partners managing partner Troy Thacker in a statement. "Amidst the dislocation caused by the Covid-19 crisis, we are particularly grateful to our investors for their support of Ara and its vision."

Earlier this year, Ara expanded its senior management team with the promotion of Johanna Schmidtke to managing director.

Investors
Ara Fund I was backed by a diverse group of institutional investors from North America, Europe and Asia, including public pension funds, sovereign wealth funds, endowments, foundations and family offices.

Capital Constellation – a $1.5bn fund-of-funds platform launched by a consortium of LPs (RPMI Railpen, The Alaska Permanent Fund Corporation and the Public Institution for Social Security of Kuwait) and advised by alternative asset manager Wafra – acquired a substantial minority stake in Ara through a $150m strategic partnership in August 2018.

Investments
The fund makes buyout and growth capital investments in companies based across North America and Europe that are poised to accelerate the decarbonisation of the industrial economy. It targets the industrial, chemicals, materials and energy efficiency sectors, seeking to build businesses that are focused on sustainability and ESG principles.

Charles Cherington, Ara's managing partner, said: "We seek near-term, tangible carbon reductions and profitable growth through rapid adoption of sustainable industrial products and services. These products are critical building blocks in the transition to a carbon-neutral future."

The fund looks for high-growth businesses with minimal technology and commodity risk. It has already made four investments: Puraglobe, a carbon-negative producer of high-specification synthetic lubricants; Transform Materials, a process technology provider for the low-carbon production of acetylene and high-purity hydrogen; Priority Power, an energy management service of renewable power to industrial and commercial businesses; and Centric Infrastructure Services, a local fibre and energy infrastructure company.

In addition, the fund has also made two industrial growth investments and has supported the bolt-on of electrical engineering and technical services company EE Partners, acquired by Priority Power in 2019.

People
Ara Partners – Troy Thacker, Charles Cherington (co-founders, managing partners).