Capital Constellation said July 16 it closed a $150 million strategic partnership with Ara Partners Group and acquired a substantial minority ownership interest in the energy-focused private-equity firm based in Houston.
As a result, Capital Constellation, a New York-based joint venture (JV), will provide Ara Partners and its affiliates with significant capital to target investments across "diverse segments of the energy and industrials sectors."
Ara Partners invests in private equity and private credit opportunities under the banners of AEM Advisers, Intervale Capital, Bayou City Energy, Cibolo Energy Partners, Junction Energy Capital, Aksiom Partners and Teleios Commodities. The firm was formed by Charles Cherington and Will McMullen, founder of Bayou City Energy.
Cherington leads Ara Partners alongside Troy Thacker, who each have more than 20 years of experience investing in and managing energy, services and infrastructure businesses. The firm and its affiliates currently manage about $2.4 billion in committed capital, according to the press release.
Constellation was formed in February by the Alaska Permanent Fund Corp., RPMI Railpen and Wafra Inc. as a JV on behalf of the Public Institution for Social Security of Kuwait (PIFSS). The JV launched with $700 million in initial commitments from its founders and is targeting total deployment of $1.5 billion to a cohort of rising alternatives managers over the next five years.
“Ara Partners will provide diversified exposure to niche energy assets that might not otherwise be available to a large pension plan,” Meshal Al-Othman, chief information officer of PIFSS, said in a statement.
In conjunction with its formation in February, Constellation made its first strategic investment with a $100 million commitment in Astra Capital Management LLC, a private-equity manager specializing in growth buyouts in the communications and technology services industries.
Constellation said its recent partnership with Ara Partners continues the JV’s strategy to back investor entrepreneurs and catalyze the creation of the next-generation of alternative investment managers.
“Our job now is to help Charles, Troy, and the entire Ara Partners team build out their vision for an integrated energy asset management firm that stretches from wellhead to home and creates value through unique network effects built into their core business model,” said Daniel Adamson, managing director at Wafra and president of Constellation, in a statement.
Wafra, which advises the JV, has more than $23 billion of assets under management and invests across a wide range of alternative asset classes, the release said.
Willkie Farr & Gallagher LLP represented Constellation in the transaction.
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