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Fortune Pushes Divestment From Bushmaster

From Fortune Magazine:

The money behind the Newtown massacre

By Dan Primack | December 17, 2012

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.

Oh, the outrage! In fact, you can practically feel the frothing coming from this reporter’s mouth.

Imagine investing in a company that is making a legal product. We sure hope the California public schoolteachers’ pension fund doesn’t invest in any energy stocks either. After all, global warming kills more than 20 people every day.

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 evil private equity and hedge fund group Cerberus has already announced that they are selling off their holdings in Freedom Group. And at a loss. (See below.)

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 billion predecessor fund, which likely made the original investment.

What I honestly don’t understand, however, is why. Check out the following part of the pension system’s statement on investment responsibility:

Non-economic factors will supplement profit factors in making investment decisions. Non-economic factors are defined as those considerations not directly related to the maximization of income and the preservation of principal. The consideration of non-economic factors is for the purpose of ensuring that the Retirement System, either through its action or inaction, does not promote, condone or facilitate social injury.

Does Freedom Group not facilitate social injury? I’m not suggesting that social injury is its mission, but it certainly is a foreseeable consequence…

Have guns ever prevented social injury? If not, why do policemen carry them?

I… think that it’s time for our large nonprofit institutions to put some of their money where their mission is. Profit should be the primary goal of their investment offices, but not at the expense of their broader purposes. If a schoolteachers union or university endowment or nonprofit foundation truly cares about stopping the next mass killing, then they should not provide capital that produces the instruments of such destruction.

For many gun enthusiasts, semi-automatic rifles like the .223 Bushmaster is about sport and individual liberty. For Freedom Group, they are about profit. If the company were unable to find private investors unless it changed internal policy — perhaps by only supplying such weaponry to police departments and military — then Freedom most likely would do so. Capital is, of course, the root of capitalism…

But, again, this is a news article in the investment section of a business magazine.

And they are already crowing about their ‘success’ here:

From Fortune Magazine:

Cerberus: We want out of gun biz

By Dan Primack | December 18, 2012

Bushmaster rifle owner decides to sell the company.

FORTUNE — Private equity firm Cerberus Capital Management announced early this morning that it plans to sell Freedom Group, a firearms conglomerate that produced the .223 Bushmaster rifle used in last week’s elementary school massacre…

Hallelujah! Perhaps this will lead to an eventual end of gun production. And there will be no more senseless murder rampages. Unless lunatics discover knives or bombs.

But, as we have previously noted, pressuring unions and other institutional investors to divest from politically incorrect things is the Left’s latest favorite tactic. For instance, the Left is also demanding that colleges divest from evil energy producing companies, because of global warming.

This article was posted by Steve Gilbert on Tuesday, December 18th, 2012. Comments are currently closed.

5 Responses to “Fortune Pushes Divestment From Bushmaster”

  1. GetBackJack

    Will make absolutely zero difference and might actually increase Bushmaster stock value as law abiding American gun owners are hell bent on purchasing the best they can afford.

  2. JohnMG

    I’m in! This tragedy will only serve to increase the sales of all manner of firearms. Obama has already been the reason behind burgeoning gun sales, even before this. It doesn’t take a genius to know what is coming down the pike vis a vis gun legislation.

    Nothing would make me happier than to see those teachers’ retirement funds take a hit, only to see the earnings skyrocket soon after their pension fund divestiture. The irony would make their collective heads explode.

    But I’m curious. For a group who vilified Mitt Romney for his involvement in hedge funds and capital management firms, what on earth possessed them to invest their retirement futures thusly?

    Their duplicity is astounding………NOT!

  3. Astravogel

    I’m confused. Wasn’t the Bushmaster left in his mom’s car?
    And weren’t the two pistols high-dollar “rest of the week daytime
    specials?”

    • Anonymoose

      Exactly, I keep wanting to scream it at these people it was two handguns, but the damage has already been done. They’ll ban the assault weapons with the promises you can keep the ones already out there–until someone uses one of those in another mass murder, then let’s collect those. The handguns are on the list, just much farther down.

      And really, Bushmaster will be able to sell as long as there’s a market–if anything the biggest problem will be competition from other manufacturers.

  4. canary

    So did the Connecticut shooter’s mother and other teacher’s get a teacher union discount for the rifle?

    The Muslims like Mohammad responsible for the belt way DC shootings like this rifle.

    And just think how many might be stored below the worship area in mosques that non-believers are not able to enter. The area near impossible for federal and local law-enforcement to get warrants for.

    Naming a rifle Bushmaster is pure genius. The Master of the bush.

    As the earth explodes and falls apart as the tree huggers and nuts like Bill Clinton and Al Gore continue to believe certain assault rifles and guns will be a must.

    Higher powered weapons will be needed to kill game at a high rate for food to feed in order for millions of people.

    3 days to bring 1 deer home won’t suffice feeding millions.




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