Merrill Buys Stake In Hedge Fund GSO

May 21 2007 | 11:02am ET

Merrill Lynch is buying a minority stake in GSO Capital Partners and will invest in a number of its strategies, the firm said today. 

The New York-based hedge fund focuses on such strategies as leveraged loans, distressed investments, special situations, capital structure arbitrage, mezzanine securities and private equity, and manages roughly $8 billion.

“The investment in GSO is a continuation of our strategy to invest in best-in-class alternative investment managers worldwide,” Rohit D’Souza, who heads Merrill’s global alternatives unit, said in a statement.

GSO was founded two years ago by Bennett Goodman, the former managing partner of Credit Suisse First Boston’s alternative capital division. Goodman said, “We look forward to collaborating with [Merill] on future projects.”

Terms of the deal were not disclosed, but The Wall Street Journal reports that Merrill would own slightly less than 20% of GSO, similar to the stake it took in hedge fund DiMaio Ahmad Capital last year.

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