The future of mortgage financiers Fannie Mae (FNMA) and Freddie Mac (FMCC) is poised for potential transformation as billionaire investor Bill Ackman, CEO of Pershing Square, is set to unveil a significant transaction proposal during a livestream on November 18. This initiative aims to enhance shareholder value for the two government-sponsored enterprises (GSEs).
In a recent post on X (formerly Twitter), Ackman articulated that his plan, if realized, would align with the objectives of the current administration by maximizing taxpayer value, mitigating the risk of widening mortgage spreads, and allowing the U.S. Treasury to establish a mark-to-market value for its equity stakes in these entities.
Ackman’s investment firm is recognized as one of the largest private stakeholders in both Fannie Mae and Freddie Mac, holding approximately 115 million shares in FNMA alone. His activism in this sector is motivated by a strong belief in the companies’ potential, which has seen FNMA’s stock price remarkably increase to around $14.64—an impressive rise of about 350% since January 2025. This surge has established Ackman as the largest common shareholder, generating nearly $2 billion in profits for his fund this year alone.
The core of Ackman’s activism revolves around the push to terminate federal conservatorship of Fannie Mae. This form of government oversight, which originated to stabilize the company during financial upheaval, imposes significant restrictions on the organization’s capital retention and operational independence. Ackman contends that lifting this conservatorship would enable Fannie Mae to regain its status as a profit-driven entity capable of delivering substantial value to shareholders, as well as enhancing the overall health of the mortgage market.
Currently, the conservatorship structure channels most of Fannie Mae’s profits to the U.S. Treasury rather than its shareholders, creating limitations on value and potential growth. By advocating for its conclusion, Ackman envisions a return to regular market functioning for Fannie Mae, which he believes would result in enhanced long-term benefits for investors, including his own firm and other stakeholders. With Ackman’s impending proposal, the prospects for Fannie Mae and Freddie Mac may soon shift dramatically, potentially ushering in a new era of independent operation and improved shareholder returns.