By Robin Respaut
(Reuters) - The largest teachers pension fund in the world plans to end its indirect investment in Remington Outdoor [FREDM.UL] assault weapon manufacturer after two years of urging for divestment.
The California State Teachers’ Retirement System (Calstrs) announced on Friday that it agreed to a proposal by its private equity partner, Cerberus Capital Management [CBS.UL].
Calstrs, along with State Treasurer John Chiang, has urged Cerberus to sell, or at least to sell Calstrs indirect interest in Remington Outdoor, formerly called the Freedom Group, since April 2013 when the Teachers' Retirement Board committed to divesting from firearm manufacturers.
Initially, the pension fund eliminated $3 million in public equity stocks from Smith & Wesson and Sturm Ruger.
But divestment from Remington Outdoor proved more difficult to achieve.
"In the more than two years since our decision to divest, we have exhausted every effort to urge Cerberus to sell," Calstrs Chief Executive Officer Jack Ehnes said in a statement. Ehnes said that as a limited partner, Calstrs possessed very limited rights.
In April, Chiang said he was frustrated that the manufacturer of the assault weapon used in the 2012 killing of 20 children and seven adults at Sandy Hook Elementary School in Connecticut was still indirectly financed by Calstrs.
The pension fund has about $525 million invested in two Cerberus funds. Disclosing the specific value of indirect holdings, such as Remington Outdoors, would violate the fund's private equity agreements.
Calstrs is the second largest pension fund in the United States with 879,000 public school educators and a portfolio valued at $193.1 billion.
In May, it was reported that Cerberus would let investors sell their stakes in Remington Outdoor. The private investment firm would take the gun maker out of its main private equity funds and put it into a separate financial entity.
(Reporting by Robin Respaut; Editing by Grant McCool)