• Home
  • About
  • Articles
  • Interviews
  • Models
  • Slides
  • Blog
Unconventional Wisdom
  • Home
  • About
  • Articles
  • Interviews
  • Models
  • Slides
  • Blog

In the Crosshairs: CalPERS Takes Aim at Gun Makers

3/24/2013

0 Comments

 

Regardless of where you stand on the "gun control" debate this story should interest you on some level...

On February 19, 2013 the investment committee of the California Public Employees' Retirement System (CalPERS) pension fund voted to divest the fund of its investments in two companies (Sturm Ruger and Smith & Wesson) that manufacture certain weapons that are not available for public sale in the State of California. Interestingly, the CalPERS investment committee was not asked to divest the fund of its position in Wal-Mart, the fund's 14th largest holding and the largest distributor of these weapons in the United States.
Picture
For those unfamiliar with this organization, CalPERS is the nation's largest public pension fund with assets totaling $248.8 billion as of December 31, 2012. As with most "institutional" investors, the CalPERS investment committee wields significant power because its portfolio management decisions (which are made within the framework of the fund's investment policies) can have a material impact on markets and/or specific companies (and other entities) in which it invests.

As it turns out, the total exposure to the CalPERS portfolio (roughly $5 million) represented by the shares of these two weapons makers was deemed to be “de minimis." In other words, the divestiture of these two stocks would not have a material impact on the portfolio. Instead, the investment committee voted to divest the fund of these two stocks because they wanted to send a message to their members, many of whom are teachers and other education professionals. They also felt that retaining these (controversial) holdings would cause more headaches for the committee in the long run.  Rob Feckner, CalPERS Board of Administration President summed it up this way...
“As trustees, we take divestment very seriously. As Californians, we also take gun violence very seriously. Eliminating these investments allows us to keep our duty to our members and, in some small part, do what we can to help stop the proliferation of weapons that can magnify and multiply horrific acts of mass violence."
The video below contains the portion of the Feb. 19 meeting in which the investment committee considered and voted to approve this motion. The discussion, which is quite interesting (especially for investment professionals) begins at 00:21:00 and ends at around 00:50:00. You will hear the investment committee members talk about a wide range of issues including fiduciary duty, investment policies, divestment policy, efficient market hypothesis, plan governance, public policy, socially responsible investing and more.

CalPERS Investment Committee Meeting: Feb. 19, 2013

The discussion about the divestiture of assault weapons related holdings begins at 00:21:00

Background

Following the tragic events that took place on December 14, 2012 at Sandy Hook Elementary School in Newtown CT, CalPERS Board Member, Bill Lockyer, California  State Treasurer, requested CalPERS conduct a review of its exposure to firearms  manufacturing within the investment portfolio. The purpose was to identify exposure to firearms manufacturers that produce and distribute to the general public, assault weapons illegal for public sale under California law (Attachments 2, 3, and 4). 

On February 17, 2009, the Investment Committee adopted a Statement of Investment  Policy Regarding Divestment (Attachment 1). This policy provides a framework for staff to analyze investments targeted for divestment. The policy also provides criteria by which divestment shall be undertaken. In general, CalPERS policy prefers  constructive engagement to divesting as a means of affecting the conduct of entities in which it invests. However, the policy provides specific circumstances under which divestment can be undertaken. 

~ CalPERS Investment Committee Memo on Assault Weapon Manufacturers Portfolio Review

Explore some more...

  • CalPERS Investment Policies (different ones for different issues)
  • CalPERS Pensions & Investments (meeting agendas, videos, etc.)
  • CalPERS Global Governance Plan (excellent framework)
  • Don't Let Your Invest Exp Become A Horror Show (previous post)
  • Investment Planning & Policy Development (slides)
  • A Written Plan Can Help Your Portfolio, WSJ
  • Making Your Investment Policy, Morningstar
  • Investment Policy Statement, Bogleheads
  • Developing A Strong Investment Policy Statement, Putnam
  • Socially Responsible Investing, Wikipedia
  • Moskowitz Prize for Socially Responsible Investing, UC Berkeley
  • Sustainable and Responsible Investing Facts, US SIF
  • Impact Investing, Stanford
  • Harnessing the Power of Impact Investing, Rockefeller Foundation
  • Impact Investing Gets a University Center, Forbes


Picture
Dynamic Wealth Optimization™
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    RAMBLE ON

    Picture
    Picture
    Picture

    RAMBLE ON, the name of my SLOG was inspired by the Led Zeppelin song with the same name. It also describes the content, which reflects my very random observations about life, work and my endless pursuit of the sublime. See tag list below...

    Archives

    November 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012

    Tags

    All
    3rd Alternative
    Aaron Hernandez
    Abuelito
    Advisors Fees
    Andrew Zolli
    Angela Maiers
    Anniversary
    Aspen Institute
    Asset Based Fees
    Asset Class
    A To B Syndrome
    Attitude
    Authenticity
    Best Band Ever
    Blackberry
    Blown Away Guy
    Book Reviews
    Books
    Bookstore
    Brain
    Brene Brown
    Brother David Steindl-Rast
    Business Optimization
    Cavemen
    Charts
    Child Development
    Clay Christensen
    Client Advocacy
    Client Experience
    Cliff
    Clouds
    Coaching
    Coffee Is For Closers
    Communication
    Competition
    Consulting
    Content Marketing
    Copernicus Radio
    Coral Gables
    Crying Cow
    Culture Narrative
    Curiosity
    Dan Ariely
    Dan Fogelberg
    Dishonesty
    Education
    Einstein
    Election
    Environment
    Epicurean Friends
    Exit
    Experience
    Extrapolation Bias
    Farm Bill
    Fast Cars
    Fee-based
    Financial Advisor Iq
    Financial Advisors
    Finra
    Fiscal Cliff
    Foresight
    Fusion Impact
    Gambler
    Glengarry Glen Ross
    Google
    Governance
    Gratitude
    Health
    Humor
    Indifference
    Infrastructure
    Innovation
    Inspired Thinking
    Investment Policy
    I Wonder
    Janisse Ray
    Jim Brown
    John Gardner
    Joni Mitchell
    Krista Tippett
    Leadership
    Led Zeppelin
    Let It Shine
    Listening
    Loyalty
    Marketing
    Market Timing
    Mark Kelly
    Maxell
    Merrill Lynch
    Miami
    Michelangelo
    Monkberry Moon Delight
    Nasa
    National Nutrition Month
    New York
    Nobel Prize
    Nutrition
    Obama
    On Being
    Philosophy
    Pieta
    Politicians
    Practice Management
    Pricing Anomolies
    Productivity
    Ram
    Ramble On
    Reich
    Resilience Thinking
    Rim
    Romney
    Schwartzberg
    Sculptors
    Self-renewal
    Slog
    Social Media
    Space
    Sports
    Stephen Covey
    Storytelling
    Strategy
    Sustainability
    Talking White Paper
    Teachers
    Team Building
    Technology
    Ted
    Templeton
    Think Outside Box
    Time In Vs Timing
    Travel
    Truth
    Unconventional Wisdom
    Video
    Voice
    Vulnerability
    Wealth Management
    What Is A Slog?
    Win-win
    You Matter


    My "Fiscal Cliff" Playlist

    Sonos Wireless Music Player

    1 FREE Audiobook RISK-FREE from Audible


    Picture
    "When you realize how little you know, you have become a philosopher."
    ~ Socrates ~


    Picture
    Picture
    Picture
    Picture
Picture
Articles & Papers | Talking White Papers | Conceptual Models | Radio Interviews | Slides & Training
  • Home
  • About
  • Articles
  • Interviews
  • Models
  • Slides
  • Blog