Ara Partners' Charles Cherington Highlights Shift in LP Expectations and Industrial Decarbonization for 2026
Ara Partners' managing partner Charles Cherington reports a notable shift in limited partners' expectations, favoring projects with proven execution over early-stage innovations. The firm is focusing on industrial decarbonization, highlighted by its acquisition of Microtec and ongoing plant developments, while anticipating that LPs in 2026 will prioritize investments in platforms demonstrating clear economic performance, particularly in waste-to-value, RNG, critical minerals, and hydrogen. The U.S. market's strategies are shaped by energy security and reindustrialization, with Canada also emerging as a key player in decarbonization efforts.
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Ara Partners' managing partner Charles Cherington reports a shift in limited partners' (LPs) preferences, moving from early-stage science projects to evidence of disciplined project execution. In 2025, the firm focused on industrial decarbonization and successfully acquired Microtec, enhancing sustainable cement substitutes.
Ara currently has 43 active plant builds, with nine startups completed, including a $340 million expansion in Tennessee and the first US-manufactured rare earth magnet facility in 25 years. Fundraising in 2025 saw consolidation, closing their debut infrastructure fund at over $800 million.
For 2026, LPs are expected to remain selective, prioritizing platforms demonstrating clear economic performance. Key investment themes will include waste-to-value, RNG, critical minerals, and hydrogen. The U.S. market is influenced by energy security and reindustrialization strategies, with Canada also emerging as a favorable environment for decarbonization efforts.
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