Cerberus selling gunmaker Freedom Group in wake of Sandy Hook massacre
Bill Saxler of Milwaukee holds a Bushmaster rifle 19 May, 2006, during the 135th National Rifle Association (NRA) Annual Convention in Milwaukee, Wisconsin.
Under pressure from a major investor, US private equity firm Cerberus Capital Management is selling its investments in gunmaker Freedom Group, which makes the semi-automatic Bushmaster AR-15 rifle used in the Connecticut school massacre.
In a press release, Cerberus expressed shock and grief at the murders of 20 children and seven adults in Newtown, but noted that Freedom Group could not be held responsible.
"We do not believe that Freedom Group or any single company or individual can prevent senseless violence or the illegal use or procurement of firearms and ammunition."
However, the company asserted that the Sandy Hook shootings compelled them to take "actions" to invest elsewhere, saying in the statement:
"It is apparent that the Sandy Hook tragedy was a watershed event that has raised the national debate on gun control to an unprecedented level. As a Firm, we are investors, not statesmen or policy makers. Our role is to make investments on behalf of our clients who are comprised of the pension plans of firemen, teachers, policemen and other municipal workers and unions, endowments, and other institutions and individuals. 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. There are, however, actions that we as a firm can take."
The New York Times reported that Cerberus appeared to be facing pressure from investors, the largest of which was "reviewing its relationship" with the company.
Bloomberg reported that Martin Feinberg — the father of Stephen Feinberg, who founded Cerebrus — lives about five miles from Sandy Hook Elementary School, in a Newtown community for people over 55.
In a brief interview with Martin Feinberg in the foyer of his building, Bloomberg said that Feinberg described the shooting as "horrendous, truly horrendous."
According to the Wall Street Journal, "Cerberus's foray into the firearms business began in 2006 when it acquired Bushmaster Firearms International, the maker of the rifle authorities say was used in Friday's shooting." The Bushmaster gun operation became part of the Freedom Group, now America’s biggest manufacturer of guns and ammunition.
The Freedom Group's holdings include Remington Arms Company and Dakota Arms.
Several gun retailers have announced that they would stop selling either all or some weapons in the wake of the Sandy Hook massacre.
According to a statement on its website, Dick's Sporting Goods pulled all guns from its store closest to the site of the massacre in Newtown, Conn.t, and suspended the sale of certain kinds of semi-automatic rifles nationwide. Wal-Mart took down information from its website about semi-automatic Bushmaster rifles.
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The California State Teachers' Retirement System (CalSTRS) — the second-biggest pension fund in the US and a major financial backer of Cerebrus — said Tuesday that it was reviewing its investments in the wake of Friday's shooting.