Cerberus Capital Management will exit its stake in firearm manufacturer Freedom Group, citing the horrific tragedy at Sandy Hook Elementary School as motivation for the firm’s decision.
On Friday, a semiautomatic rifle manufactured by Freedom Group company Bushmaster was used in a mass shooting at Sandy Hook that left 27 dead – including 20 children between the ages of 6 and 7.
“We cannot comprehend the losses suffered by the families and friends of those killed by the unthinkable crimes committed that day,” Cerberus said in a statement on Tuesday. “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. Accordingly, we have determined to immediately engage in a formal process to sell our investment in Freedom Group.”
We cannot comprehend the losses suffered by the families and friends of those killed by the unthinkable crimes committed that day.
On Monday, a spokesman for longtime Cerberus limited partner the California State Teachers’ Retirement System indicated that its staff would review Cerberus’ investment in Freedom Group in light of the shootings, according to a Reuters report. The Pennsylvania Public School Employees' Retirement System, a long-time Cerberus LP with about $8.2 million invested in Freedom Group through Cerberus, also expressed its concern to the firm.
“While a limited partner, like PSERS, does not have the authority to purchase or sell partnership portfolio companies, PSERS did contact Cerberus … to express our concern over its investment in the Freedom Group,” the system said in an email statement. “Since our contact, we learned … that Cerberus has decided to sell its interest in the Freedom Group. PSERS appreciates Cerberus' quick response and will continue to monitor this matter.”
Cerberus formed Freedom Group in 2006 after acquiring Bushmaster and several other firearm and ammunition manufacturers, such as Remington, DPMS Firearms and Marlin Firearms. The firm had planned to take Freedom Group public through a $200 million offering, which it filed in 2009 but later requested to withdraw in 2011, according to reports. Cerberus did not indicate why Freedom Group withdrew its IPO.