Ara Partners closes $2.8B for third climate fund

Private equity firm Ara Partners has closed $2.8 billion for a third fund to invest in decarbonizing industrial sectors like green fuels, metal recycling and low carbon chemicals.

Why it matters: The fund adds more needed capital for growth companies in an underfunded sector.

Details: Ara Partners, with offices in Houston, Boston and Dublin, now has $5.6 billion in total assets under management.

• The new fund has already backed four companies: German magnetic materials producer Vacuumschmelze; Tennessee-based sustainable packaging company Genera; London-based CFP Energy, which works with European industrial companies; and London-based biogas developer CycleØ.

Big picture: Ara's latest haul follows news that KKR is looking to raise a $7 billion global climate fund to invest in energy transition companies and technologies like energy storage.

• Private equity and infrastructure investors have a major role to play in funding the deployment of mature climate technologies.
• Congruent Partner Abe Yokell recently noted: "There's a global move toward investing institutional capital into decarbonization: in the growth'y area," pointing to the funds of Galvanize and Brookfield.
• While climate growth rounds dropped in the first half of the year, they appear to be roaring back.