Goldman Sachs is one of several firms to have suffered recently

The firm said the performance of its Global Equity Opportunities fund had "suffered significantly".

Other investors pumping money into the fund include CV Starr and Eli Broad.

World stocks slumped last week on fears that a rise in mortgage defaults would prompt a wider crisis. Other companies have also bailed out hard-hit funds.

Credit crunch

"The investment will also provide the fund with more flexibility to take advantage of the opportunities we believe exist in current market conditions," said Goldman Sachs.

But David Viniar, chief financial officer at the group, said the move was "not a rescue".

Goldman said two other firms that it manages - North American Equity Opportunities Fund and Global Alpha - have also experienced problems recently.

Market volatility developed in recent weeks as finance firms began to discover the degree to which they were exposed to the sub-prime sector, which specialises in lending to high-risk individuals with poor credit, by charging high interest rates.

As more banks have closed or frozen funds this has affected the supply of money in the market, raising fears over a looming credit crunch.

The situation has prompted private equity firm KKR to say that its financing of deals - such as the buyout of Alliance Boots - would be more costly than it had anticipated.

This may "adversely affect our results of operations and financial condition," the company said in the filing.

Since Thursday central banks in Europe, Japan and the US have injected billions of dollars in a bid to inject cash into the banking system.

In June, Bear Stearns injected $1.6bn to bail out two hedge funds, later saying they were worth "very little".

Hedge funds, which use investments from rich individuals in complex transactions, have seen their performance deteriorate in the wake of the recent share sell-off.