California State Teachers' Retirement System (CalSTRS) has accepted a proposal from fund manager Cerberus enabling the pension fund to divest its interests in Remington Outdoor. This completes a two-year effort from CalSTRS to divest from most firms related to the manufacturing of firearms.

Calstrs, along with State Treasurer John Chiang, has urged Cerberus to
sell, or at least to sell Calstrs indirect interest in Remington
Outdoor, formerly called the Freedom Group, since April 2013 when the
Teachers' Retirement Board committed to divesting from firearm
manufacturers. In April, Chiang said he was frustrated that the manufacturer of the
assault weapon used in the 2012 killing of 20 children and seven adults
at Sandy Hook Elementary School in Connecticut was still indirectly supported by CalSTRS.

In May, it was reported that Cerberus would let
investors sell their stakes in Remington Outdoor. The private investment
firm would take the gun maker out of its main private equity funds and
put it into a separate financial entity.

“Consent to monetize our exposure to Remington Outdoor completes our decision to divest from banned firearm manufacturers,” said CalSTRS Chief Executive Officer Jack Ehnes. “All along we have sought a transaction that balances the best financial interests of the more than 879,000 educators we serve, while holding consistent with the values of our membership.”

In April of 2013 the Teachers’ Retirement Board committed to divest from companies that manufacture firearms illegal for sale in California. Within months of the decision to divest, CalSTRS eliminated $3 million in public equity stocks from Smith & Wesson and Sturm Ruger. Prior to that, CalSTRS’ private equity partner, Cerberus, publicized its intent to sell holdings of Remington Outdoor, formerly Freedom Group.

“In the more-than two years since our decision to divest, we have exhausted every effort to urge Cerberus to sell, or to unilaterally sell our indirect interest in Remington Outdoor,” said Ehnes. “However, as a limited partner in a private equity investment pool controlled by Cerberus, CalSTRS possesses very limited rights.”

CalSTRS includes provisions in new private equity agreements that exclude firearms subject to divestment and offer an opt-out option if such investments occur.

CalSTRS's portfolio is valued at around $193.1 billion as of April 30, 2015, making it the largest global educator-only pension fund. The fund administers a hybrid retirement system, including traditional defined benefit, cash balance and voluntary defined contribution plans. Moreover, CalSTRS provides disability and survivor benefits to family members of pension holders.

CalSTRS invests for the 879,000 public school educators and their families in California's 1,700 school districts, county education offices and community college districts. Calstrs is the second largest pension fund in the United States.