Low-carbon specialist Ara Partners eyes $500m March first close

The firm is part owned by Capital Constellation, a GP seeding JV between the Alaska Permanent Fund, RPMI Railpen and Wafra, which acquired a minority stake in 2018.

Ara Partners, a Houston-based firm targeting business that help to reduce carbon emissions, expects to have raised more than three-quarters of its latest fund by the end of this month.

The Houston-based firm is targeting $650 million for Ara Fund II – its sophomore growth equity and buyout fund – according to a source with knowledge of the matter. It is expected to hold a first close on $500 million on 31 March, the source said.

A spokesman for Ara did not return requests for comment.

Ara was launched in 2017 by Charles Cherington, a former managing partner at US energy firm Intervale Capital, and Troy Thacker, a former founding partner at agribusiness firm Paine Schwartz Partners. The firm invests across the industrial and manufacturing; chemicals and materials; green fuels; and food and agriculture sectors.

Its portfolio includes Puraglobe, a producer of motor oils that help mitigate carbon emissions; plastics recycling business Circulus; and Path, an industrial services platform that cleans storage tanks.

Ara is part owned by Capital Constellation, a GP seeding joint venture between the Alaska Permanent Fund Corporation, RPMI Railpen and Wafra, which acquired a minority stake in 2018, per a statement.

The firm raised $400 million against a $500 million target for its 2018-vintage Ara Fund I, according to PEI data. It held a final close in May last year.

The WSJ first reported on Ara Partners’ Fund II launch on Thursday.

Low-carbon strategies are becoming increasingly commonplace across the private markets, with much of the progress driven by LPs. Last year, the California State Teachers’ Retirement System teamed up with Japan’s Government Pension Investment Fund and the UK’s USS Investment Management to call for enhanced disclosures under the framework of the Task Force on Climate-related Financial Disclosure.

Some 35 institutional investors, representing $5.5 trillion in assets, have signed up to the UN’s Net-Zero Asset Owner Alliance, which pledges to reduce their portfolio carbon footprint to net-zero greenhouse gas emissions by 2050. The California Public Employees’ Retirement System, Allianz and Caisse de dépôt et placement du Québec are among the signatories.