Tuesday, December 18, 2012
The money behind the Newtown massacre (Fortune)
By Dan Primack - December 17
One way to reduce mass shootings is for big institutions to stop funding the assault weapon manufacturers.
FORTUNE – Do you know who owns more than a 6% stake in the maker of .223 Bushmaster rifles, like the one used last Friday to murder 20 first graders and seven adults in Newtown, Connecticut? California public schoolteachers.
The company in question is Freedom Group, a privately-held firearms conglomerate formed by private equity and hedge fund group Cerberus Capital Management. Cerberus created the platform in April 2006 via the acquisition of Bushmaster, after which it added another 10 makers of firearms, ammunition and accessories (including Remington, Marlin Arms and Barnes Bullets).
The California State Teachers' Retirement System (CalSTRS) committed to invest a whopping $500 million into a $7.5 billion Cerberus fund that has helped bankroll Freedom Group. That means that it effectively could own a 6.67% stake in the gun maker, which filed to go public in late 2009 before pulling the offering in early 2011. In fact, the figure could be even higher since CalSTRS also committed $100 million to a $1.4 billion predecessor fund, which likely made the original investment.
[Update: CalSTRS said Tuesday afternoon that it owns 2.4% of Freedom Group, and I have requested an explanation of how they arrive at that figure.]….
SEE ALSO California teacher pension system invests in maker of gun used in Newtown, CT shooting (OC Watchdog)
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