A month after protesters demanded that CalSTRS dump its investment in a firearms manufacturer tied to the mass shooting at a Connecticut school, it appears they will get their wish.
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.”
Shortly after the shooting, facing an outcry from CalSTRS and others, Cerberus put Freedom Group up for sale. It was unable to find a buyer. Meanwhile, CalSTRS said it was hobbled by legal restrictions that made it unable to simply get rid of its $375 million investment in Cerberus.
The California Federation of Teachers staged a “teach-in” at CalSTRS headquarters and Cerberus’ regional office in Los Angeles last month in an effort to pressure CalSTRS to walk away from the investment. The pension fund refused.
The Times said Cerberus, in its letter to its investors, said it was frustrated with its inability to sell Freedom. “We are disappointed that we were unable to effect an outright sale of the company or other comparable transaction,” it wrote. It gave investors 30 days to accept the offer.