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Lockyer Urges California Pensions to Sell Firearms Stocks

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Dec. 18 (Bloomberg) -- California Treasurer Bill Lockyer said he’ll propose that the state’s public pension funds, the two largest in the U.S., sell off investments in firearm manufacturers that make guns prohibited under state law.

The California State Teachers’ Retirement System, known as Calstrs, with $155 billion of assets, has a stake in Cerberus Capital Management LP, a private equity firm that owns Freedom Group, the maker of the Bushmaster .223-caliber semiautomatic rifle that police said was the primary weapon in the Dec. 14 shootings that killed 20 elementary school children in Newtown, Connecticut.

“Our investment branch is examining the Cerberus investment to determine how best to move forward given the tragic events,” a spokesman for the fund, Ricardo Duran, said in a statement.

The school shooting, the second deadliest in U.S. history, has ignited a national debate over gun control and stricter bans on assault rifles. California prohibits semiautomatic assault weapons, specifically including the Bushmaster, and magazines that can hold more than 10 rounds of ammunition, according to the Attorney General’s website.

Lockyer, a board member of both Calstrs and the California Public Employees’ Retirement System, the biggest U.S. pension, asked yesterday that both funds review their holdings to determine how much they’ve invested in gunmakers. He said he would then propose to divest those stakes.

A Calpers spokesman didn’t immediately respond to a request for comment on its holdings.

To contact the reporter on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net