The firm said the Sandy Hook massacre, in which 20 children and seven adult staff were killed by a suicidal gunman, was “a watershed event that has raised the national debate on gun control to an unprecedented level”.
Cerberus created Freedom Group after buying gun manufacturer Bushmaster in 2006 – the company which built the AR 15 rifle used by the shooter in the Connecticut school.
Its decision comes as CalSTRS, the country’s second largest pension fund with $155bn under management, said it was reviewing its investment with Cerberus in the wake of the shootings.
CalSTRS had invested $751.4m with Cerberus by the end of March 2012, according to its website.
A statement from Cerberus said, “It is not our role to take positions, or attempt to shape or influence the gun control policy debate. That is the job of our federal and state legislators.
“There are, however, actions that we as a firm can take. Accordingly, we have determined to immediately engage in a formal process to sell our investment in Freedom Group.
“We will retain a financial advisor to design and execute a process to sell our interests in Freedom Group, and we will then return that capital to our investors.
“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.
“Our thoughts and prayers are with the families and communities impacted by this tragic and devastating event.”
US President Barack Obama gave the strongest indication yet he would look to change US gun ownership laws while speaking at yesterday’s vigil for those killed at Sandy Hook.
He said, “We can’t tolerate this anymore. These tragedies must end, and to end them, we must change.
“We will be told that the causes of such violence are complex, and it is true.
“No single law, no set of laws can eliminate evil from the world or prevent every senseless act of violence in our society.
“But that can’t be an excuse for inaction. Surely we can do better than this.”
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