Investment bank and brokerage Merrill Lynch & Co., Inc (NYSE: MER), announced Monday that that it will purchase a minority stake in investment management firm GSO Capital partners LP.

The New York-based firm will invest in a number of GSO’s strategies. Currently, GSO specializes in leveraged finance with approximately $8.0 billion of capital in hedge funds and other investment vehicles. Terms of the deal were not announced. However the Wall Street Journal reports Merrill will own slightly less than 20 percent of GSO.

“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.”

GSO was founded in 2005 by three former Credit Suisse First Boston investment bankers, Senior Managing Partner Bennett Goodman, and Managing Partners Tripp Smith and Douglas Ostrover. The firm currently has over 115 employees in New York, London, Houston and Los Angeles.

“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.

GSO was one of the firms involved in the buyout of Reader’s Digest by Ripplewood Holdings LLC last year.