Yale’s Endowment Won’t Invest in Outlets That Sell Assault Weapons

(Bloomberg) -- Yale University’s $27.2 billion endowment won’t invest in retail outlets that market and sell assault weapons to the public.

Yale’s advisory committee on investor responsibility recommended the ban to a committee of the board of trustees, which adopted the policy recently. The New Haven, Connecticut-based school, the second-richest in the U.S., announced the change in a statement Aug. 21.

College endowments are often asked by students to shed their investments in controversial holdings, such as those related to climate change or guns. Following the Parkland, Florida, high school shooting in February, financial institutions and businesses involved in the gun industry have faced public pressure.

Yale’s policy applies to traditional retail distributors, as well as promoters and dealers who organize and sell assault weapons at gun shows. It was prompted by a member of the Yale faculty, who earlier this year asked the advisory committee to consider a request that Yale divest any holdings in companies that manufacture or sell military style assault rifles.

“The loss of life resulting from mass shootings in our country is deeply tragic,” according to the statement.

The eight-member advisory committee, which includes faculty members, staff, students and alumni, advises the Yale Corporation’s committee on investor responsibility and “determined that mass shootings cause incontrovertible societal harm and retailers supplying assault weapons to the general public cause grave social injury,” according to the policy on the school’s website.

The advisory group develops recommendations for presentation to the Yale Corporation on issues related to the endowment.

Jonathan Macey, the committee’s chairman and Yale law professor who specializes in corporate finance and securities law, said he didn’t believe the endowment had any holdings of retailers that sell assault-weapons currently.

In recommending the policy to Yale’s governing board, the trustee committee gave “special consideration” to factors including the distinction between manufacturers and retail distributors of assault weapons -- since assault weapons may be used for sanctioned purposes by the military and law enforcement -- and because a large number of shootings occur at educational institutions.

“Yale is committed to research, scholarship and education for the betterment of the world; this requires an environment in which teachers and students are free from gun violence and the fear of gun violence,” according to the statement.

Yale divested in certain U.S. companies that operated in South Africa during apartheid, and more recently adopted proxy voting guidelines with respect to tobacco companies and private prisons.

In 2014, David Swensen, Yale’s chief investment officer, wrote to the fund’s external investment managers, asking them to assess the costs of climate change on their investments following a university-wide effort to address sustainability. Managers sold less than $10 million in investments that were “inconsistent with our principles,” the school said in 2016.

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