While Washington, as well as state legislatures, contemplate policy responses to the horrific tragedy that left dozens dead in Newtown, Conn., others weren’t waiting. Some major investment houses and pension funds began to speak with their pocketbooks.
Cerberus Capital Management, a private investment firm, last week announced plans to sell the company that makes the Bushmaster rifle used in the Newtown shootings. The investment house called the Newtown massacre a “watershed event” that would presumably create new laws restricting those type of guns and change the value of the company.
While the Cerberus decision may indeed not have been an altruistic action but more a financial one, clearly, public sentiment influenced its decision. In announcing the sale, Cerberus said the shooting “raised the national debate on gun control to an unprecedented level.”
We’re thinking that unprecedented level of discussion will go on for some time.
Cerberus invests money for large pension funds and has as one of those investments a company called Freedom Group, the largest firearms maker in the U.S. One of its investors is the California State Teachers Retirement System. The pension fund was reviewing its $600 million investment in Cerberus in response to the shooting, according to a spokesman. The fund would own, through Cerberus, 2.4 percent of Freedom Group.
Cerberus also appeared to be motivated by significant movement in public sentiment for stricter gun laws, ones that would likely outlaw the guns made by the companies that have Cerberus backing.
Cerberus tried to stay above the political questions, stating: “It is not our role to take positions, or attempt to shape or influence the gun control policy debate. That is the job of our federal and state legislators.”
Whether Cerberus likes it or not, it is influencing the debate.