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Merrill Takes Sterling Stamos Stake

Laurie Kulikowski

Merrill Lynch(MER Quote) is moving further into the alternative investments space.

The New York investment bank agreed to take a noncontrolling investment in Sterling Stamos Capital Management, a private investment firm with $4 billion in assets under management.

Merrill Lynch did not disclose how much it paid for the minority stake. Sterling Stamos, with offices in New York, Tokyo and Menlo Park, Calif., will remain an independent firm.

Sterling Stamos invests in mainly five asset classes -- absolute return, fixed income, equity, real assets and private equity, according to its Web site.

The news comes just three days after Merrill Lynch agreed to purchase a minority stake in GSO Capital Partners, an alternative asset manager with $8 billion in institutional assets under management.

GSO, founded in July 2005 by three former Credit Suisse(CS Quote) executives from its alternative investment business, focuses on leveraged loans, distressed investments, special situations, capital structure arbitrage, mezzanine securities and private equity.

Merrill said it will invest capital in a number of GSO's strategies.

Last October, the company also purchased a minority stake in a hedge fund run by a former Credit Suisse veteran. DiMaio Ahmad Capital, an alternative asset-management firm that specializes in credit products, was co-founded by Jack DiMaio, a former veteran bond specialist at the Swiss firm.

Shares rose 19 cents to $94.01.