State treasurers are calling out for their pension funds to review investments in gun and ammunition makers after the tragic events that left 20 children and seven adults dead at Sandy Hook Elementary School in Newtown, Conn. on Dec. 14.

The ripple is felt throughout the business world. One private equity firm, Cerberus Capital Management LP, has gone as far as exiting its investment in gun maker Freedom Group Inc. That announcement came after California's treasurer spoke out on the state's pension funds, which are invested in Cerberus, having ties to illegal guns.

Denise Nappier, Connecticut's treasurer, followed suit. On Dec. 19, she said she would review the state's pension plan's investment in gun companies. The funds were invested in Alliant Tech Systems, an aerospace and defense company that supplies ammunition to law enforcement agencies and commercial customers. The fund owned stock and bonds in the company valued at $887,733 at the time the release was issued. While Nappier did not call for the pension funds to divest from Allied, she agreed that after the Newtown tragedy, shareholders must scrutinize "our direct exposure, as well as our indirect exposure to companies throughout the supply chain."

Massachusetts treasurer Steve Grossman also asked the state's pension fund, Pension Reserves Investment Management, to review any investments in gun companies but did not call for any divestments, citing the pension fund's duty to maximize returns.

Rhode Island treasurer Gina Raimondo asked the state's pension fund to review its investments on Dec. 19. Raimondo directed consulting firm Cliffwater to review the pension fund investments for firearm and ammunition manufacturers. A search showed the fund was invested in United Sporting Companies, a firearms distributor, through private equity firm Wellspring Capital Management. Wellspring responded by ending its distribution of automatic rifles as of Jan. 1.

California treasurer Bill Lockyer (pictured), stated on Dec. 17 that he believes neither California State Teachers' Retirement Systems (CalSTRS) or California Public Employees' Retirement System (CalPERS) "should have any investments in the makers of guns that are illegal in California, especially when those guns have been used to kill 20 innocent children and six innocent adults."

Private equity firm Cerberus took action after a CalSTRS spokesperson announced on Dec. 17 that the pension fund was examining the Cerberus investment to determine "how best to move forward given the tragic events." A day later, Cerberus then agreed to sell portfolio company Freedom Group, which owns Bushmaster Firearms International, maker of the AR 15 rifle, one of the guns allegedly used in the Sandy Hook massacre. Freedom Group makes Remington, Bushmaster Firearms, DPMS/Panther Arms, Marlin, H&R, the Parker Gun, Mountain Khakis, Advanced Armament Corp, Dakota Arms, Para USA and Barnes Bullets brand products.

"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," says the statement. "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."

Marin Feinberg, Cerberus co-founder and chief executive Stephen Feinberg's 86-year old father, is a Newtown resident.


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