Ultra Capital has nabbed $130 million for its third fund, the firm tells ImpactAlpha. The Philadelphia-based growth equity firm invests in companies and developers advancing the energy transition, including solar, battery storage, distributed generation, EV charging and fleet electrification.
The strategy, says Ultra’s Tom Ferraro, “addresses a funding gap for companies seeking $5-25 million in growth or asset capital that are not at the scale to attract larger private equity or infrastructure capital.” The fund was backed by unnamed family offices and institutional investors.
Fund II has made five investments so far, with a sixth in the pipeline. The portfolio includes Peachtree Infrastructure, which develops renewable energy to power commercial buildings, L-Charge, which provides fast, off-grid charging for electric fleets, and battery storage company On.Energy.
“We still see a great deal of opportunity in the market,” says Ferraro. Despite the hand-wringing over the Republican spending bill, which slashed clean energy incentives, investors now know what they’re dealing with, he says. “From a risk standpoint, the risk is more defined.”
Distributed to paid-in capital
The latest fundraise follows on the track record of Ultra’s 2020-vintage second fund, which has distributed 18% back to investors to date. The fund had an early strategy of acquiring gas-fired power plants with existing grid interconnections, and developing the adjacent land with renewable energy. The gas plants would be transitioned to peaker plants to handle energy spikes or decommissioned.
In June, Ultra and its partner Panamint refinanced a Minnesota gas plant by selling $166 million in notes to Global Infrastructure Partners and PGIM Private Capital. It plans to distribute those proceeds to investors this month, and then will sell its equity stake in the plant as well as an 80-megawatt battery system built on the land.
Ferraro says as of June, the second fund has logged a 41% IRR and 2.7x multiple on invested capital. “The strategy has really been a success.”
