The University of California system said on Friday it will drop its roughly $30 million worth of investments in private prison companies following demands from a black student group.
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."
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 minorities.
Klein said the UC system has no plans to drop its Wells Fargo investments.
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 in September.
Source: Reuters / CNBC