CalSTRS Divests of Certain Firearms Holdings

Fri Apr 12, 2013 6:16pm EDT

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Investment Committee completes divestment process from assault weapons
manufacturers in accordance with the CalSTRS 21 Risk Factors
WEST SACRAMENTO, Calif.--(Business Wire)--
The California State Teachers` Retirement System (CalSTRS) Investment Committee
today approved the fund`s divestment from firearms companies that manufacture
weapons that are illegal in California. 

In December 2012, following the Sandy Hook Elementary School tragedy in
Connecticut, CalSTRS board member and California State Treasurer, Bill Lockyer,
issued a call for the fund to divest from companies which manufacture firearms
and high-capacity magazines that are illegal for sale to, or possession by, the
general public in the state of California. 

On January 9, 2013, the CalSTRS Investment Committee directed staff to begin the
divestment process with the two publicly traded U.S. companies within the
CalSTRS portfolio that manufacture these products, Sturm Ruger and Smith &
Wesson. As of December 31, 2012, the total market value of CalSTRS holdings in
Sturm Ruger and Smith & Wesson was approximately $3 million, which represented
0.3 basis points of the Global Equity portfolio. 

"The tragic events that took place at the Sandy Hook Elementary School that
December morning were truly eye-opening. I think our actions today are an
appropriate response, because this tragedy illustrates all too well the hazards
such firearms pose to human health and well-being," CalSTRS Investment Committee
Chairman Harry Keiley said. 

Today, CalSTRS Chief Investment Officer, Christopher Ailman, recommended
divestment in accordance with the CalSTRS 21 Risk Factors, specifically the
Human Health risk factor. Staff also determined that they can achieve a
portfolio of equal risk and return without including these two particular
investments, thereby continuing to reduce risk and maximize returns for the

"As a long-term investor, we see the impact of this event sparking an elevated
level of regulatory scrutiny to these products," Ailman said. "Such events and
the human health hazards these weapons pose, prompted us to put into motion the
actions leading up to today`s decision to divest." 

The January CalSTRS board vote to begin the divestment process required staff to
commence engagement between CalSTRS investment leaders and management teams from
the portfolio`s identified firearms companies; to analyze the costs of
divestment; and to discuss divestment with experts in the fields of firearms,
public safety research and investments. CalSTRS followed a similar process
leading up to its 2009 decision to divest from the tobacco industry. 

The California State Teachers` Retirement System, with a portfolio valued at
$161.5 billion as of February 28, 2013, 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. For 100 years,
CalSTRS has served California's public school educators and their families, who
today number 862,000 from the state`s 1,600 school districts, county offices of
education and community college districts.

Krista Noonan/Ricardo Duran, 916-414-1440

Copyright Business Wire 2013

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