Ara Partners Launches New Energy Value Chain Decarbonization Fund
Ara Partners, a private equity firm that specializes in funding industrial projects and companies committed to net-zero carbon emissions, announced that it has partnered with HF Capital to launch Ara Energy Decarbonization, a new strategy that will seek to decarbonize conventional energy assets across North America.
Alongside the launch, HF Capital announced that it has committed up to $725 million Ara’s strategies, with a focus on acquiring, optimizing operations and decarbonizing energy businesses and assets across North America
HF Capital is the investment arm of the Haslam family, who founded and built the Pilot Company into North America’s largest travel center and transportation fuel business, with more than 750 locations, selling it fully to Berkshire-Hathaway earlier this year. Shameek Konar, former CEO of Pilot until the acquisition, will lead Ara Energy Decarbonization. Konar has extensive experience in the energy sector, with previous positions at Constellation Energy, Mercuria Energy, and at Goldman Sachs as a principal in the firm’s commodity investments, including oil, gas, coal, and power. Pilot was also an innovator in reducing carbon emissions, with over 1.5 billion gallons of renewable fuels sold to the transportation sector in 2022, and during Konar’s tenure as CEO, Pilot partnered with General Motors to develop a nationwide network of DC fast chargers at Pilot locations, with the aim of reducing “range anxiety” for EV owners.
Konar said:
“Ara has honed a team of seasoned investors, builders, operators and facilitators that is truly unmatched in this industry. The world’s energy demands are increasing and complex, and renewable power needs time and support for it to fulfill rising global energy demand. Ara’s builder skillset, portfolio network and decarbonization management knowledge is perfectly positioned to attack the carbon-intensive energy sector. This partnership and new strategy will significantly reduce carbon emissions and play a meaningful role in transitioning our economy to a low-carbon future.”
Ara Energy Decarbonization will seek out projects and companies that are developing methods and technologies to reduce carbon emissions at ethanol plants, natural gas power plants, and other conventional energy assets and sources. Investment targets will include organizations working in the conventional energy value chain, including power generation, merchant biofuels, and supply and distribution businesses. Studies show that today’s energy sector is responsible for more than 75% of global greenhouse gas (GHG) emissions. The substantial growth in data centers and AI computational technology means demand for energy is surging, though the ability to fulfill that demand is hampered by renewable energy interconnection challenges and grid constraints. Natural gas is filling the gap and estimates expect the peak of natural gas demand won’t come until the 2040s. The Ara strategy seeks to help bring about a much-needed reduction in emissions at the biggest contributing energy sources.
Ara Partners was founded in 2017 by Charles Cherington and Troy Thacker, with a focus on industrial decarbonization investments, in sectors including industrial and manufacturing, chemicals and materials, energy efficiency and green fuels, infrastructure, and food and agriculture. Last year, Ara announced that it had closed on more than $3 billion in new capital commitments for its third fund, Ara Fund III, seeking out buyout and growth investments at companies based in the U.S., Canada and Europe, with the potential to achieve carbon emissions reductions across sectors.
“It is an uncomfortable truth that highly pollutive energy sources are going to play an essential role in delivering an energy transition over the next several decades,” said Charles Cherington, Co-Founder and Managing Partner of Ara. “We can ignore these staggering carbon emissions, or we can apply our proven methods and financing expertise to decarbonize the conventional energy value chain. With Shameek, his team, and the Haslam Family’s partnership, we gain the expertise needed to integrate substantial climate impact across another hard-to-abate sector without disrupting energy output. This is an important milestone for Ara as we continue to decarbonize the most critical and pollution intensive sectors to advance the global transition to net-zero.”