Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)

News & Politics News & Politics

Cerberus to Sell Freedom Group, a Gunmaker

Posted by on Dec. 18, 2012 at 10:01 AM
  • 1 Replies

Cerberus to Sell Freedom Group, a Gunmaker

Remington rifle cartridges at Cabela's sporting good store in Scarborough, Maine.Gretchen Ertl for The New York TimesRemington rifle cartridges at Cabela’s sporting good store in Scarborough, Maine. The Remington line is owned by the Freedom Group.

The private equity firm Cerberus Capital Management said on Tuesday that it would sell its investment in the gunmaker Freedom Group in response to the school shootings last week in Connecticut.

Cerberus acquired Bushmaster — the manufacturer of the rifle used by the gunman in the Newtown attacks that killed 27 people, including 20 schoolchildren — in 2006.

The private equity giant later merged it with other gun companies to create the Freedom Group, which reported net sales of $677.3 million for the nine months that ended in September 2012, a 20 percent increase compared with the same period last year.

“It is apparent that the Sandy Hook tragedy was a watershed event that has raised the national debate on gun control to an unprecedented level,” Cerberus said in a news release.

The private equity firm said it had made the investments in gun manufacturers on behalf of its clients, which include pension funds and other institutional investors. Cerberus added that it was the role of legislators to shape the country’s gun policy.

“We believe that this decision allows us to meet our obligations to the investors whose interests we are entrusted to protect without being drawn into the national debate that is more properly pursued by those with the formal charter and public responsibility to do so,” Cerberus said.

Stephen A. Feinberg, founder of Cerberus Capital.Haraz N. Ghanbari/Associated PressStephen A. Feinberg, founder of Cerberus Capital.

The private equity firm said it would retain a financial adviser to sell its interests in the Freedom Group, and would return the proceeds to investors. Cerberus, based in New York, was founded in 1992 by William Richter and Stephen Feinberg, and has more than $20 billion of assets under management.

Cerberus is one of several private equity firms that have holdings in gun manufacturers. Colt Defense, which was spun out of the maker of the .44-40 Colt revolver, is jointly owned by Sciens Capital Management, a fund advised by the Blackstone Group and another fund operated by Credit Suisse.

Tuesday’s announcement follows a statement from the California State Teachers’ Retirement System, a large pension fund, that it was reviewing its investment in Cerberus in light of the firm’s holding in the Freedom Group.

“At this point, our investment branch is examining the Cerberus investment to determine how best to move forward given the tragic events of last Friday in Newtown, Conn.,” a spokesman for the Californian public pension fund told Reuters on Monday.

Neil Gough contributed reporting from Hong Kong.

by on Dec. 18, 2012 at 10:01 AM
Add your quick reply below:
You must be a member to reply to this post.
Replies (1-1):
_Kissy_
by on Dec. 18, 2012 at 10:08 AM
:)
Posted on CafeMom Mobile
Add your quick reply below:
You must be a member to reply to this post.
Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)