Chicago Public School Teachers' Pension & Retirement Fund will divest all of its $130,267 in public-market holdings in retail assault weapons manufacturers, said Carmen Heredia-Lopez, chief investment officer.
The $9.7 billion pension fund took the action in response to the Dec. 14 killings at Sandy Hook Elementary School in Newtown, Conn.
The pension fund's trustees voted to “instruct the separate account managers to liquidate any and all public-market holdings in retail assault weapon manufacturers as soon as reasonably practicable, and in accordance with the managers' fiduciary duties,” Ms. Heredia-Lopez said in an e-mail.
Also, the trustees instructed “private-market managers to review investments in retail assault weapon manufacturers, and work with CTPF staff to evaluate divestment options.”
In public-market holdings, the pension fund owns 2,334 shares, valued at $122,675 in Sturm Ruger & Co. and 856 shares, valued at $7,592, in Smith & Wesson Holding Corp. Ms. Heredia-Lopez said in the e-mail.
CTPF holds the two stocks through a $93 million enhanced index fund managed by Northern Trust Investments, Ms. Heredia-Lopez said in an interview.
In private equity, it holds an interest valued at $129,821 in Battenfeld Technologies Inc. But Battenfeld might make only accessories and not firearms, Ms. Heredia-Lopez said in the interview. If so, the pension fund “might not divest it,” she said. CTPF is reviewing the company, she said.
Clearview Capital, a private equity manager, acquired Battenfeld last June, according to Clearview's website.
CTPF invests in Clearview through a Muller & Monroe Asset Management fund of funds, Ms. Heredia-Lopez said in the interview. CTPF has $20 million invested with Muller & Monroe, Ms. Heredia-Lopez said.
“The CTPF board recognizes that as a fiduciary it must act solely in the interest of the participants and beneficiaries of the fund,” Ms. Heredia-Lopez said in the e-mail. “The board has an obligation to protect fund assets and minimize the risk of investment losses. Consistent with its fiduciary duties, the board is sensitive to the significant reputational, regulatory and statutory risks that may affect the shareholder value of assault weapon manufacturers.”
In addition, the board instructed CTPF staff “to monitor the economic and regulatory environment, and work with legal counsel to develop comprehensive divestment and investment risk policies,” Ms. Heredia-Lopez added in the e-mail.