Merrill Lynch is to buy a minority stake in Bennett Goodman's hedge fund GSO Capital Partners LP, which manages $8 billion and employs 115 people in New York, London, Houston and Los Angeles. The fund specialises in loans to companies with low credit ratings and other distressed investments. This is the second hedge fund Merrill has bought into. Last October the bank paid an undisclosed sum for a minority stake in DiMaio Ahmad Capital, the investment-management company run by Jack DiMaio, the ex-head of Credit Suisse's alternative-investments business. “This investment in GSO is a continuation of our strategy to invest in best-in-class alternative investment managers worldwide,” Rohit D'Souza, head of Merrill's stock-trading unit who oversees the bank’s hedge-fund investments, said in a statement. GSO Capital was founded in 2005 by former Credit Suisse bankers including Mr Goodman, who was previously at Donaldson, Lufkin & Jenrette, Tripp Smith and Doug Ostrover,