Cerberus Capital Management, a private equity firm that owns a stake in Bushmaster, the gun manufacturer that produced the rifle used in the massacre of students and teachers at an elementary school in Connecticut, announced early Tuesday that it intends to sell that investment.
“We were shocked and deeply saddened by the events that took place at the Sandy Hook Elementary School in Newtown, CT on December 14, 2012,” the company declared in statement sent out to news outlets. “We cannot comprehend the losses suffered by the families and friends of those killed by the unthinkable crimes committed that day. No words or actions can lessen the enormity of this event or make a dent in the pain that was inflicted on so many.”
Over the past six years, Cerberus has amassed a holding company called the Freedom Group, which has purchased some of the biggest names in American gun manufacturing, including Bushmaster. The firm’s decision to sell off the interests in firearms companies and return the capital to its investors underscores how Friday’s shooting -- which took the lives of 20 children -- has reinvigorated the national debate on gun control, not just for activists, but also for investors.
“It is apparent that the Sandy Hook tragedy was a watershed event that has raised the national debate on gun control to an unprecedented level,” Cerberus asserted in its statement. “As a Firm, we are investors, not statesmen or policy makers. Our role is to make investments on behalf of our clients who are comprised of the pension plans of firemen, teachers, policemen and other municipal workers and unions, endowments, and other institutions and individuals. It is not our role to take positions, or attempt to shape or influence the gun control policy debate. That is the job of our federal and state legislators. There are, however, actions that we as a firm can take.”
According to Bloomberg News, the father of Cerberus chief executive Stephen Feinberg lives in Newtown, Conn. Cerberus said in its statement that it would "immediately" begin the process of selling off the assets of the Freedom Group.
"We believe that 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 that is more properly pursued by those with the formal charter and public responsibility to do so."
Cerberus noted in the statement that many of its investors include pension funds for firefighters, teachers, police officers and other municipal workers. The California State Teachers' Retirement System currently has more than $700 million committed to Cerberus funds. A spokesman for the retirement system told Reuters in a statement that officials were "examining the Cerberus investment to determine how best to move forward given the tragic events of last Friday in Newtown, Connecticut."
The Freedom Group's holdings include such familiar names as Remington Arms Company and Dakota Arms. The company had net sales of more than $677 million through September of this year, up from $564 million for the same period last year.