CalSTRS took its time deciding but in the end the pension fund chose to follow the steps taken by other state pension funds to pull their investment out of companies that operate private prisons.
Mary Childs filed this report in Barrons:
New York state’s pension plan became the first to withdraw fully from the industry when Comptroller Tom DiNapoli sold the last of the pension’s shares in private prison companies in July. The next month brought divestment, or votes to divest, from the New Jersey Pension Fund, Trenton, and the Chicago Teachers Pension Fund. New York City and Philadelphia have divested, and Cincinnati may be on its way.
CalSTRS worked to engage with CoreCivic (ticker: CXW) and the GEO Group (GEO) about their business practices, visiting detention facilities and meeting with senior management. CalSTRS staff confirmed that facilities run by those two companies are not separating children from their parents or families, and are not housing unaccompanied minors, the pension said.
“Based on all the information and advice we were provided, the board decided to divest,” Investment Committee Chair Harry Keiley said in a press release on Wednesday.
The process of divesting starts immediately, and should be completed in six months. The decision affects about $12 million in assets held between CalSTRS’s equities and fixed-income portfolios.