CalSTRS Finalizes Divestment from Firearms Manufacturers
WEST SACRAMENTO, Calif. – California State Teachers’ Retirement System’s (CalSTRS) Chief Executive Officer Jack Ehnes, announced today that CalSTRS has consented to Cerberus’ proposal allowing CalSTRS to exit its economic interest in Remington Outdoor, ending a two-year divestment effort.
“Consent to monetize our exposure to Remington Outdoor completes our decision to divest from banned firearm manufacturers. All along we have sought a transaction that balances the best financial interests of the more than 879,000 educators we serve, while holding consistent with the values of our membership.
“In April of 2013 the Teachers’ Retirement Board committed to divest from companies that manufacture firearms illegal for sale in California. Within months of the decision to divest, CalSTRS eliminated $3 million in public equity stocks from Smith & Wesson and Sturm Ruger. Prior to that, CalSTRS’ private equity partner, Cerberus, publicized its intent to sell holdings of Remington Outdoor, formerly Freedom Group.
“In the more-than two years since our decision to divest, we have exhausted every effort to urge Cerberus to sell, or to unilaterally sell our indirect interest in Remington Outdoor. However, as a limited partner in a private equity investment pool controlled by Cerberus, CalSTRS possesses very limited rights.
“CalSTRS includes provisions in new private equity agreements that exclude firearms subject to divestment and offer an opt-out option if such investments occur.
“CalSTRS has taken a very clear, vocal stand on the issue of firearm divestment among the nation’s pension funds and remains very committed to our decision.”
The California State Teachers’ Retirement System, with a portfolio valued at $193.1 billion as of April 30, 2015, is the largest educator-only pension fund in the world. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans. CalSTRS also provides disability and survivor benefits. CalSTRS serves California’s 879,000 public school educators and their families from the state’s 1,700 school districts, county offices of education and community college districts.