After Shuffle, CalSTRS May Exit Firearm Investment After All

CalSTRS

Pension360 covered the protests last month that stemmed from CalSTRS’ indirect investment in a firearms manufacturer whose gun was used in a Connecticut school shooting.

CalSTRS is invested in the gun manufacturer through a fund run by Cerberus Capital Management. Investors with money in such vehicles, for numerous reasons, aren’t able to withdraw their money at any time.

But now, Cerberus has found a way to accommodate CalSTRS, by shifting the gun manufacturer to a different fund and letting investors cash out of that specific holding.

From the Sacramento Bee:

Cerberus Capital Management has agreed to let investors such as the California State Teachers’ Retirement System unload their investment in Freedom Group, maker of the assault rifle blamed for the 2012 massacre in Connecticut, according to a report by The New York Times.

A New York private equity firm, Cerberus made the offer to CalSTRS and other investors in a letter obtained by The Times. The newspaper reported that the gun holdings will be placed in a separate investment vehicle.

“CalSTRS is carefully reviewing the letter to ensure it meets our requirements,” said Ricardo Duran, a spokesman for CalSTRS, in an email. “We are hopeful that a liquidation vehicle has been fashioned that allows us to cash out of our economic exposure, which is what we’ve been seeking all along.”

Investors have 30 days to decide whether they will take Cerberus’ offer. It’s extremely likely CalSTRS will.

 

Photo by Stephen Curtin via Flickr CC License 

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