California Teachers’ Fund Hunting for Gun Holdings, Ailman Says

The California State Teachers’ Retirement System, the second-biggest U.S. public pension, will examine its holdings to see whether it’s invested in gunmakers such as the one that manufactured the weapon used in the Connecticut school shooting, the fund’s chief investment officer said.

“We will look for all the other companies in the U.S. and internationally, particularly the gun manufacturers and the products they make, and look at the mix of what are banned in California and whether there is a civil valuable use to their products,” Chris Ailman, the fund’s chief investment officer, said during an interview on Bloomberg Television’s “Market Makers.”

Calstrs, as the $155 billion fund is known, said it had invested 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 and six adults in Newtown, Connecticut.

Cerberus announced yesterday it would put that company up for sale.

California Treasurer Bill Lockyer has said he’ll propose that the state’s public pension funds, the two largest in the U.S., divest investments in firearm manufacturers that make guns prohibited under state law. Lockyer is a board member of both Calstrs and the $246 billion California Public Employees’ Retirement System.

The teachers’ pension has policies requiring it to evaluate the investment risks “associated with products that pose significant threats to human well-being” though those rules were put in place in 2008, after the fund bought into Cerberus.