The Chicago Teachers' Pension Fund's board of trustees voted on Friday to phase out investments in companies that run private prisons or immigrant detention centers, saying the businesses have an outsized negative impact on minorities and the poor.
The $10.8 billion public pension fund's investment managers have been directed to liquidate holdings of the companies "as soon as reasonably practical," the statement said.
The fund did not identify the prison and detention center companies whose stock they own.
"We know these institutions disproportionately incarcerate people of color and those who live below the poverty line, house immigrant children and perpetuate the separation of immigrant families," Fund President Jay C. Rehak said.
The companies also "take advantage of and put at risk unprotected, low-wage employees, while lacking fiscal and operational transparency," Rehak said.
The Chicago public school teachers pension fund follows in the footsteps of New York City pension funds, which last year became the first to divest fully from the private prison industry. The California State Teachers Retirement System is also evaluating its holdings of private correctional facilities.
The vote comes days after the American Federation of Teachers, which is among the nation's largest teachers unions, urged pension funds to cut their exposure to investment firms that have funneled millions of dollars into private prisons.
The group criticized the firms and said they were getting rich on the U.S. government's practice of separating migrant families.
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