The decision comes amid a wave of student protests against racism
at college campuses across the country as well as the Black Lives
Matter civil rights movement against the U.S. criminal justice
system, which disproportionately impacts black people.
The UC system's chief investment officer, Jagdeep Singh Bachher,
made the decision after meeting with students of the Afrikan Black
Coalition, university spokeswoman Dianne Klein said.
Klein said the UC system has a policy against "blanket divestment,"
but made the decision after further review.
"This made sense given our conclusion that, based on risk over the
next several years, these holdings were not a good investment for a
long-term investor such as UC," Klein said.
Klein said the amount invested was less than $30 million, a tiny
fraction of the UC system's $100 billion investment portfolio. Klein
said she did not know exactly which private prison companies the
system held shares in or exactly how much money was invested.
The coalition, a California-wide student group, said the UC system
had $25 million invested in Corrections Corporation of America and
The Geo Group.
Corrections Corporation spokesman Jonathan Burns said: "Frankly,
we're delighted to have a greater share of investors who are
thoughtful about our business, can tell the difference between
rhetoric and reality, and agree that the free market is a great
creator of innovation and economic opportunity."
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The Geo Group could not be immediately reached for comment.
The student union also called on the UC system to divest some $425
million of investments in Wells Fargo & Co, which it said is a large
investor in private prison firms and has been accused in courts
across the country of practicing predatory lending against
Klein said the UC system has no plans to drop its Wells Fargo
In July, Wells Fargo won a dismissal of lawsuits in Chicago and Los
Angeles that alleged it violated the federal Fair Housing Act. The
California city of Oakland filed its own lawsuit against the company
(Reporting by Curtis Skinner in San Francisco; Editing by Leslie
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