Friday, 31 October 2014
Last updated 8 hours ago
Dec 18 2012 | 11:59am ET
In the wake of last week's tragic shootings at a Connecticut elementary school, private equity firm Cerberus Capital Management is selling a gunmaker it bought six years ago.
The $20 billion New York-based firm said it would sell Freedom Group, to avoid "being drawn into the national debate" on gun control. Cerberus took pains to note that "Freedom Group does not sell weapons or ammunition directly to consumers, through gun shows or otherwise," and only sells "to federally-licensed firearms dealers and distributors in accordance with applicable laws and regulations."
Freedom Group made one of the rifles used in Thursday's shooting in Newtown, Conn., which killed 20 children and seven adults, including the shooter.
"We do not believe that Freedom Group or any single company or individual can prevent senseless violence or the illegal use or procurement of firearms and ammunition," Cerberus said.
"Our thoughts and prayers are with the families and communities impacted by this tragic and devastating event."
Cerberus' move comes amidst pressure from the press and investors. The California State Teachers Retirement System said it was reviewing its $500 million commitment to Cerberus due to the Connecticut tragedy. "Our investment branch is examining the Cerberus investment to determine how best to move forward given these tragic events," a CalSTRS spokesman said. In addition, California Treasurer Bill Lockyer has proposed barring investments in firearms companies that make weapons banned under state law. Former New York Gov. Eliot Spitzer wrote that it was "time to target Cerberus, the private equity firm that dominates the gun industry."
Cerberus actually created Freedom Group, formally known as Remington Outdoor Co., in 2007, after it acquired Bushmaster Firearms International and Remington Arms Co. Earlier this year, it named a number of Cerberus executives to the gun giant's management team, including CEO Robert Nardelli as Freedom Group's CEO.
Cerberus founder Stephen Feinberg's father actually lives in Newtown, a tony suburb about 65 miles north of New York City, and told Bloomberg News today that the shooting was "devastating."
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