A launch and disconnect clutch for the electric motor of a P2 hybrid powertrain is compact and provides improved operation. The clutch is mounted between the engine and transmission in the space formerly occupied by the torque converter. The clutch assembly is configured so that actuation, compensation and cooling are provided by only two oil channels. The clutch utilizes single-sided reaction plates which achieve high clutch gain thereby providing high torque capacity under electric operation and improved launch shudder characteristics.