Water Street Healthcare Partners Closes Fund II At $650M Cap

Water Street Healthcare Partners has closed its second fund at its hard cap of $650 million. The original target for Water Street Healthcare Partners II L.P. was for $600 million of investor commitments. The Chicago-based firm, which focuses solely on the health care industry now has more than $1 billion in total capital under management.

Returning investors in the second fund include Adams Street Partners, Allianz Private Equity Partners, Goldman Sachs Asset Management and New York Life Capital Partners. New investors were Soros Strategic Partners LP, Blue Cross Blue Shield of Arizona, Danske Private Equity, as well as a number of university endowments and foundations.

The first investment for fund II is the acquisition of a controlling stake in CareCentrix, a provider of home health care services, which the firm made in partnership with Gentiva Health Services Inc., which was the parent company of CareCentrix.

To date, in addition to the CareCentrix deal, Water Street Healthcare has completed 10 proprietary investments since raising its first fund two years ago. The firm was founded by Jim Connelly, the former president and COO of Caremark International, and Tim Dugan and Kip Kirkpatrick, who previously worked together leading the health care investments operations for JP Morgan Chase’s private equity arm, One Equity Partners.