The fund decided to divest from companies that manufacture firearms that are illegal for sale or possession in the state of California in response to a letter by CalSTRS board member and California State Treasurer, Bill Lockyer.
"Divestment in such firms would comply with CalSTRS' existing investment policy and comport with the board's fiduciary duty to members and beneficiaries," Lockyer wrote in a letter to Investment Committee Chair Harry Keiley. Lockyer's letter noted that assault weapons clearly fall into the category of being a product "detrimental to public health and safety."
The process of divestment will involve engagement between CalSTRS investment leaders and the management teams of the identified firearms manufacturers in which the fund is invested; analysis of the costs of divestment; and discussions with experts in the fields of firearms, public safety research and investments.
In December, CalSTRS began reviewing its investments in private equity funds managed by Cerberus Capital Management that were invested in the Freedom Group, which manufactures firearms. Cerberus later issued a statement noting its intent to immediately engage in a formal process to sell its investment holdings in the firm.