On Tuesday, the private equity firm Cerberus Capital announced its intent to sell the Freedom Group, which owns Bushmaster Firearms. It's a great "feel good" measure for Cerberus's management and its investors. Cerberus declared, "There are, however, actions that we as a firm can take. Accordingly, we have determined to immediately engage in a formal process to sell our investment in Freedom Group." And the "pension plans of firemen, teachers, policemen and other municipal workers and unions, endowments, and other institutions and individuals" that invest in Cerberus issued statements supporting the decision.
Unfortunately, selling Freedom Group to the highest bidder, which would presumably continue selling semi-automatic weapons and high-capacity magazines to civilians, accomplishes nothing.
Cerberus's investors, which include the California State Teachers' Retirement System (CalSTRS) and the New York State Common Retirement Fund, can and must do more. The firemen, teachers, policemen and other municipal workers and union members whose funds are invested with Cerberus should do the following:
Of course public pension funds have a fiduciary responsibility to shareholders. However, as CalSTRS Statement on Investment Responsibility states: "Non-economic factors will supplement profit factors in making investment decisions. Non-economic factors are defined as those considerations not directly related to the maximization of income and the preservation of principal. The consideration of non-economic factors is for the purpose of ensuring that the Retirement System, either through its action or inaction, does not promote, condone or facilitate social injury."
Ironically, the only impact that the tragedy in Newtown has had for the Freedom Group, Cerberus and its investors so far is a massive INCREASE in sales, as gun shops are reporting their highest sales in decades.
CalSTRS's Investment Committee of the Teachers' Retirement Board has a meeting scheduled for January 9. Please write to CalSTRS CEO, Jack Ehnes, to endorse these actions. He can be reached by commenting on his blog.
New York State citizens (and especially employees covered by the Common Retirement Fund, which has a $50 million investment in Cerberus) can share opinions by emailing email@example.com.
Please also sign the Change.org petition I've started.
Please help me spread the word to California Teachers, New York State employees, and to others who might be invested in Cerberus funds.
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