SACRAMENTO -- The nation's largest teachers' pension fund announced Tuesday that it was reviewing its firearms holdings after determining that its investment in a gun maker was linked to one of the weapons used in last week's Connecticut school massacre.

The California State Teachers' Retirement System, which manages $155 billion in assets, was reviewing whether those investments comply with the fund's own social and ethical standards.

The fund was found this week to have invested $600 million in the private equity firm Cerberus Capital Management, which owns gun maker Freedom Group International. Cerberus announced Tuesday it will sell its holdings in the manufacturer of the military-style rifle used to kill 20 schoolchildren and six adults at Sandy Hook Elementary School in Newtown, Conn.

CalSTRS spokesman Michael Sicilia also disclosed Tuesday that the fund owns approximately $4 million in shares of Sturm, Ruger & Co. and $1.7 million in shares of Smith & Wesson Holding Corp., two publicly traded gun manufacturers.

He said it will take days to compile a list of all firearm holdings because the massive fund has a broad range of investments.

"These are tragic and devastating acts that took place at Sandy Hook and they have prompted many in this country to call for change and we're determining what we can do differently to help ensure that this unthinkable act never happens again," Sicilia said.

Joe Nation, a former state lawmaker and a leading critic of the state's pension funds, suggested that "someone didn't do their homework."

State Treasurer Bill Lockyer has asked CalSTRS and the California Public Employees' Retirement System, at a minimum, divest from any companies that manufacture guns that are illegal in the state. Lockyer, a Democrat, is a member of both pension boards and has a say in the funds' investment strategy.

"CalPERS and CalSTRS should not be invested in any company that makes guns which are illegal in California," Lockyer said in a statement. "These weapons have no place in our communities. Our families and children are safer without them."

According to CalPERS' website, the state employee pension fund committed $400 million to Cerberus this year. A message left for CalPERS wasn't immediately returned Tuesday.

The federal assault weapons ban expired in 2004 but California has its own ban. Democratic state lawmakers are now calling for new laws to close what they consider loopholes that allow gun manufacturers to sell devices to reload ammunition faster and kits to increase capacity.

Keeping track of the teacher fund's investments can be a difficult task. CalSTRS invests retirement benefits for more than 850,000 California public school teachers, workers and their families. It invests more than half of its assets in stocks but also has investments in bonds, private equity, real estate and other categories.

According to CalSTRS, the fund invested $100 million in Cerberus in 2003 and another $500 million in 2007. They are just two of hundreds of private equity funds the system has invested in over the years. Private equity accounts for about 14 percent of the fund's holdings, or nearly $22 billion.

Cerberus cobbled Freedom Group together by buying Bushmaster, Remington, and other well-known gun brands starting in 2006. As a result, CalSTRS says it owns 2.4 percent of Freedom Group.

But CalSTRS said Tuesday that Cerberus' investment in Freedom Group slipped through its own internal review because its policy was not expanded to include private equity investments until 2008, after it had invested in Cerberus.

Sicilia said the fund is now reviewing for other firearm holdings prior to 2008.

"We are making sure that we're going to through all of our investments to make sure that those criteria are taking into consideration," he said.

Since the 1980s, the retirement system has had to factor political and social strife in reviewing potential investments. The ethics policy, however, does not prohibit the fund from making an investment.

The fund includes such considerations as respect for human and workers rights, environmental impact and discrimination. As a result, the pension system has divested in firms doing business with South Africa to end racial apartheid, avoided oil and energy investments in Iran and it dropped tobacco companies from its portfolio in 2008.