Ara Partners closed its latest industrial decarbonization fund with over $3 billion in investor commitments across both a closed-end fund and dedicated limited partner co-investment vehicles.
Investors in the firm’s Ara Fund III include the Washington State Board of Investment ($200 million); LACERA ($125 million); Border to Coast Pensions ($120 million); Texas Municipal Retirement System ($75 million); and District of Columbia Retirement Board ($50 million).
Charles Cherington, managing partner of Ara, said in a statement, “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 is a continuation of $5.6 billion firm’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 investment team 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 industrials and manufacturing, chemicals and materials, energy efficiency and green fuels, and food and agriculture.
“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.”
Ara was founded by Cherington and Thacker in 2017. Ara’s 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 served as legal counsel in the formation of Fund III, which succeeded Fund II that closed in 2021 at $1.1 billion.