Chicago-based Water Street Healthcare Partners has closed its second private equity fund, at $650 million, bringing the firm’s total capital under management to more than $1 billion.

Investors in the fund include a combination of domestic and international pension funds, endowments, financial institutions and fund-of-funds.

Like Water Street’s first fund, the firm’s second fund will focus on investing in middle-market companies and divisions of global companies in healthcare sectors, including diagnostic devices, medical products, pharmaceutical services, specialty distribution, specialty pharmaceuticals and specialty services.

“Health care continues to be an outstanding opportunity for investment as one of the largest and most profitable industries in the U.S.,” said Kip Kirkpatrick, a founding partner of Water Street.