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Published: Tuesday, Dec. 18, 2012 / Updated: Tuesday, Dec. 18, 2012 07:38 PM

Cerberus selling stake in gunmaker following Conn. massacre

One day after CalSTRS said it was examining its investment stake in a gunmaker linked to the mass shooting in Connecticut, the manufacturer's owner said it would put the company up for sale.

Cerberus Capital Management, a private equity firm in New York, announced today it would sell its investment in Freedom Group, a conglomerate that owns Bushmaster Firearms International. A Bushmaster semi-automatic weapon was used in the massacre at Sandy Hook Elementary School in Newtown, Conn.

The announcement came a day after CalSTRS said it was reviewing its investment in Cerberus. The teachers' retirement system has put $625 million into three funds controlled by Cerberus as of March 31.

"Events that occurred in Connecticut are a wake-up call to re-examine our investments," CalSTRS spokesman Ricardo Duran said Monday.

Officials with the pension fund couldn't be reached today. State Treasurer Bill Lockyer, who sits on the boards of CalSTRS and CalPERS, called on both pension funds to rid their portfolios of investments in manufacturers of weapons that are illegal in California.

"We are investors, not statesmen or policymakers," Cerberus said. "There are, however, actions we as a firm can take. Accordingly, we have determined to immediately engage in a formal process to sell our investment in Freedom Group."