Tuesday, December 18, 2012

UPDATED: Freedom Arms owner wants to throw gun maker overboard because of shooting

In its news accounts, the left-leaning Huffington Post is saying  that several states' teachers' pension funds are invested in firearms manufacturers.

But the story also goes on to add the parent owner of the Freedom Group (Remington Arms, Bushmaster, Marlin, others)  wants to bail out because of the Connecticut shooting.

From Huffington Post, edited version to allow for press release from Cerberus Capital, which owns Freedom Arms:

Gun manufacturers have enjoyed lucrative growth in recent years, a trend now under scrutiny after the massacre of 20 children inside a Connecticut elementary school.

Investors in the industry include one group that now stands out conspicuously: public school teachers, via their pension funds.

According to a Huffington Post survey of public databases, several of the nation's largest teachers' retirement systems -- including those in California, New York and Texas -- hold tens of millions of dollars worth of stock in two publicly traded gun manufacturers, Sturm, Ruger & Co. and Smith & Wesson Holding Corp.

The California Teachers Retirement System has also committed more than $700 million toward private equity funds managed by Cerberus Capital

 Over the last six years, Cerberus has amassed a holding company, the Freedom Group, which has purchased some of the nation's most prominent firearms brands

According to securities filings, the Freedom Group owns Bushmaster, the company that built the rifle that law enforcement authorities say was used in Friday's shooting spree in Connecticut.

UPDATE to include the Cerberus Group press release:

Cerberus Capital Management Statement Regarding Freedom Group, Inc.

NEW YORK, Dec. 18, 2012 /PRNewswire/ -- We were shocked and deeply saddened by the events that took place at the Sandy Hook Elementary School in Newtown, CT on December 14, 2012. 

We cannot comprehend the losses suffered by the families and friends of those killed by the unthinkable crimes committed that day.  No words or actions can lessen the enormity of this event or make a dent in the pain that was inflicted on so many. 

In 2006 affiliates of Cerberus Capital Management, L.P. made a financial investment in Freedom Group. 

Freedom Group does not sell weapons or ammunition directly to consumers, through gun shows or otherwise.  Sales are made only to federally licensed firearms dealers and distributors in accordance with applicable laws and regulations. 

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.  

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.  The debate essentially focuses on the balance between public safety and the scope of the Constitutional rights under the Second Amendment. 

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. 

Accordingly, we have determined to immediately engage in a formal process to sell our investment in Freedom Group.  We will retain a financial advisor (sic)  to design and execute a process to sell our interests in Freedom Group, and we will then return that capital to our investors. 

We believe that this decision allows us to meet our obligations to the investors whose interests we are entrusted to protect without being drawn into the national debate that is more properly pursued by those with the formal charter and public responsibility to do so. 

Our thoughts and prayers are with the families and communities impacted by this tragic and devastating event. 

About Cerberus Capital Management, L.P.
Established in 1992, Cerberus Capital Management, L.P. is one of the world's leading private investment firms.  Cerberus has more than US $20 billion under management invested in four primary strategies: distressed securities & assets; control and non-control private equity; commercial mid-market lending and real estate-related investments. 

From its headquarters in New York City and large network of affiliate and advisory offices in the US, Europe and Asia, Cerberus has the on-the-ground presence to invest in multiple sectors, through multiple investment strategies in countries around the world.

Media Contacts:

Peter Duda:   
+1 (212) 445-8213
John Dillard:  
+1 (212) 445-8052
Cerberus Media Line:
+1 (212) 891-1558
SOURCE Cerberus Capital Management, L.P.

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- Jeffrey L. Frischkorn
Twitter: @Fieldkorn

1 comment:

  1. You know that it is a shame that the auto companies make cars that can excede 70 miles per hour & cause the deaths of thousands of inocent children every year!! Lets just outlaw cars that kill and maim so many. Start now and disarm all the people who drive fast cars, trucks and motercycles.