Mega Fund Drops Guns After Connecticut Shooting
NEW YORK (TheStreet) - The California State Teachers' Retirement System (CalSTRS) is dropping its investment in the manufacturers of firearms that are illegal in the state of California, following through on an effort pushed by the state's treasurer in the days after a Dec. 14 shooting at Sandy Hook Elementary School in Newtown, CT, killed 26 people, including 20 schoolchildren.
In the wake of the shooting, California's State Treasurer Bill Lockyer recommended the divestiture of firearms deemed illegal in the state, however, a formal action wasn't agreed until the CalSTRS board met Wednesday afternoon.
The move reflects the first major investment decision taken against firearm manufacturers in the wake of the Connecticut shooting, and puts California pension funds once more at the head of socially directed investments.
"I think we've taken appropriate action, given the unspeakable and tragic loss of life that occurred in Connecticut last month-the latest in an ongoing line of similar incidents involving assault weapons and mass casualties," Harry Keiley, CalSTRS Investment Committee Chair, said in a Jan. 9 statement. CalSTRS, with a portfolio valued at $154.3 billion as of Nov. 30, 2012, is the largest teachers pension fund in the world.
The fund's chief investment officer will direct index fund managers to divest shares in manufacturers of firearms deemed illegal in California and companies that manufacture high-capacity ammunition cartridges, CalSTRS said in a statement.
The process of divestment will involve engagement between CalSTRS investment leaders and the management teams of the identified firearms manufacturers in which the fund is invested... CalSTRS' 2009 decision to divest from the tobacco industry followed a similar process," the fund said.
CalSTRS will also identify private equity investments that might violate its new investment policy, according to Bloomberg.