Merrill Lynch announced Monday that it has agreed to purchase a minority stake in GSO Capital Partners LP, a New York-based investment management firm.

As part of the transaction, Merrill Lynch will invest capital in a number of GSO’s strategies. Financial terms were not disclosed.

GSO is an alternative investment manager with approximately US$8 billion in assets under management and offices in New York, London, Houston and Los Angeles. The firm, which was founded in July 2005, has 115 employees worldwide and invests in a broad array of public and private securities across multiple investment strategies. Key areas of focus include leveraged loans, distressed investments, special situations, capital structure arbitrage, mezzanine securities and private equity. It manages capital on behalf of insurance companies, banks, pension funds, endowments, foundations, family offices and fund of funds.

“GSO has a uniquely talented team of investment professionals who have extensive expertise in the leveraged finance marketplace,” said Greg Fleming, co-president of Merrill Lynch & Co., Inc. “We look forward to working together to grow their firm by utilizing the global resources of Merrill Lynch.”

“Merrill Lynch has world-class franchises in products and geographies that are very relevant to our investment strategies,” said Bennett Goodman, senior managing partner of GSO. “We look forward to collaborating with them on future projects.”

“This investment in GSO is a continuation of our strategy to invest in best-in-class alternative investment managers worldwide,” said Rohit D’Souza, head of Global Alternative Investments and global head of Equities at Merrill Lynch.