Cerberus Capital Management will sell its holding in gun maker Freedom Group after the Connecticut school massacre led the California State Teachers’ Retirement System (CalSTRS) to review its allocation to the company.
“This decision allows us to meet our obligations to the investors whose interests we are entrusted to protect without being drawn into the national debate” on gun control, Cerberus said yesterday.
The private equity firm said it would engage a financial adviser to immediately start the process of divesting the holding and would return the capital to investors.
California treasurer Bill Lockyer said he would propose that CalSTRS and the California Public Employees’ Retirement System, the two largest US pension funds, sell off investments in firearm manufacturers that made guns prohibited under state law.
“Our investment branch is examining the Cerberus investment to determine how best to move forward given the tragic events of Friday in Newtown, Connecticut,” said Ricardo Duran, a CalSTRS spokesman. Cerberus oversees $751 million (R6.5 billion) for the fund.
Freedom Group is the US’s biggest manufacturer of guns and ammunition, with nine plants and 3 100 employees. Cerberus built the firm through acquisitions, including Remington Arms and Bushmaster Firearms, the maker of the semi-automatic rifle that police say was used by 20-year-old Adam Lanza in the December 14 attack. – Bloomberg