Billionaire hedge fund manager Bill Ackman is once again highlighting what he sees as one of the Federal Government’s most overlooked assets, its stake in mortgage finance giants, the Federal National Mortgage Association FNMA or Fannie Mae, and the Federal Home Loan Mortgage Corporation FMCC, or Freddie Mac.
What Happened: Speaking at the 2025 Forbes Iconoclast Summit last week, Ackman called them “two remarkable businesses,” referring to their $7 trillion in mortgage guarantees, on which they collect 65 basis points in annual fees.
According to Ackman, the founder of Pershing Square Holdings Ltd. PSHZF, “the government's interest in Fannie and Freddie is worth approaching $300 billion,” but he believes they are not going to give it up, while criticizing their 16-year-long conservatorship which prevents them from operating as private corporations.
Both firms were brought under the control of the Federal Housing Finance Agency (FHFA) following their bailout in 2008, and what was initially intended as a temporary measure to stabilize the housing market has since become a permanent arrangement.
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Ackman, who was short both companies during the 2008 financial crisis, reversed course in 2012 and has since become one of their most prominent advocates.
He argues that Fannie and Freddie are now well-capitalized and far safer than they were before the crash, and could help offset the ballooning federal deficits if returned to private hands.
Critics of privatization argue that ending government control could push mortgage rates higher, as the removal of an explicit federal guarantee might lead investors to demand a higher risk premium on mortgage-backed securities.
Ackman, however, has pushed back against this, saying that Fannie Mae and Freddie Mac are now much better placed, with capital ratios above 2.5%, compared to 0.45% pre-crisis, which he thinks “would have been enough during the financial crisis had they not gone into subprime.”
He also emphasized the systemic protections in place, such as “a belt, suspenders, another belt, and more suspenders,” referencing the firms' capital levels, backstops from the Treasury, and robust earnings power.
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Why It Matters: Ackman’s Pershing Square has been the largest common stockholder in both entities for 13 years and has been a vocal advocate for ending the conservatorship for some time.
Recently, he called for the cancellation of $348.2 billion in Senior Preferred Stock liability on the company’s balance sheets, which he labeled as “fictitious.”
He said, “The government has been paid more than it was contractually owed under the extremely onerous terms of the SPS,” referring to the $301 billion being paid back of the original $191 billion invested by the government, resulting in an 11.6% annualized return for taxpayers.
Ackman had, in fact, recommended both companies as investments back in December, saying that he expects them to exit conservatorship under the Trump administration, while adding that he sees “large asymmetric upside versus downside,” which sent the stocks soaring.
Just as he had predicted two weeks ago, President Donald Trump said that he was giving “very serious consideration” to taking Fannie Mae and Freddie Mac public.
“Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right,” Trump said.
Price Action: Shares of Pershing Square Holdings were down 0.31% on Friday, trading at $52.62, while Fannie Mae and Freddie Mac were up 0.67% and 4.17% during the day, respectively.
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