(Corrects headline and paragraph 1, to investment, not
investments, to make clear CalSTRS only addressed Cerberus
investment; drops extraneous word "the," paragraph 1)
* CalSTRS invested $751.4 million with Cerberus
* Newtown shooter used rifle made by Cerberus-controlled
By Greg Roumeliotis
NEW YORK, Dec 17 The California State Teachers'
Retirement System (CalSTRS) said on Monday it was reviewing its
investment with Cerberus Capital Management LP, the private
equity firm that controls Bushmaster Firearms International, in
light of last week's school shooting in Connecticut.
With $155 billion in assets under management, CalSTRS is the
largest teachers' fund and the second-largest pension fund in
the United States, making it a powerful voice in the investment
community that may influence others in reaction to the shooting.
"At this point our investment branch is examining the
Cerberus investment to determine how best to move forward given
the tragic events of last Friday in Newtown, Connecticut,"
Ricardo Duran, a spokesman for the public pension fund manager,
said in an email.
CalSTRS had invested $751.4 million with Cerberus by the end
of March 2012, according to its website. Cerberus owns Madison,
North Carolina-based Freedom Group Inc, which includes
Bushmaster, the manufacturer of the AR-15 rifle used by the
shooter in the Newtown killings.
Spokespeople for Cerberus and Freedom Group did not respond
to requests for comment.
CalSTRS has disclosed investments in three Cerberus funds
that were raised between 2003 and 2008. It was not immediately
clear which of the three funds Cerberus had used to invest in
Freedom Group or how broad CalSTRS' review of its commitment to
Investments in private equity, which involve fund managers
buying, reorganizing and then selling companies in a bid to make
a profit, are notoriously illiquid. A private equity fund
usually has a ten-year lifespan and investors wishing to exit
may have to find another party willing to buy their stake in the
Cerberus acquired Bushmaster in 2006 and later merged it
with other gun companies to create Freedom Group, which reported
net sales of $677.3 million for the nine months ending September
2012, up from $564.6 million in the corresponding period a year
Founded in 1992 by Stephen Feinberg and William Richter, New
York-based Cerberus has over $20 billion under management
invested and shares its name with a mythical three-headed dog
that in Greek mythology guards the entrance to the underworld.
Newtown's schools remained closed on Monday after a weekend
of mourning that followed Adam Lanza's shooting spree on Friday
that claimed 28 lives, including those of 20 young children, his
mother's and his own.
Police said Lanza was armed with hundreds of bullets in
high-capacity magazines of about 30 rounds each for the
Bushmaster AR-15 rifle and two handguns he carried into the
school, and had a fourth weapon, a shotgun, in his car outside.
A growing number of U.S. lawmakers - including a leading
pro-gun senator - called on Monday for a look at curbing assault
weapons like the one used in a massacre at a Connecticut grade
school, a sign that attitudes toward gun control laws could be
(Reporting by Greg Roumeliotis in New York; editing by Gary
Hill, Gary Crosse)