Bill Ackman has reinforced his warning to the Trump administration regarding the privatization of Fannie Mae and Freddie Mac.
On Wednesday, the CEO of hedge fund Pershing Square Capital Management took to X to tout his slow and steady reform plan as the “best idea for 2026,” arguing that a rushed initial public offering would undervalue the mortgage giants and potentially destabilize the housing market.
Ackman’s strategy, which he initially detailed in an X post on Dec. 30, 2024, then provided additional details on in November and reshared on X today, calls for a “walk before you run” approach. He proposes that the U.S. Treasury first formally acknowledge that the government-sponsored enterprises (GSEs) have repaid their bailout funds through years of profit sweeps.
Next, the Treasury would exercise its warrants to take a 79.9% ownership stake in the companies. Then the final step would see the companies relisted on the New York Stock Exchange (NYSE) to establish a market valuation before the Treasury ends its stake in the companies.
The hedge fund manager’s caution aligns with skepticism from housing finance experts regarding the feasibility of a near-term IPO. As Scotsman Guide covered, legal experts had described a 2025 IPO timeline as “extraordinarily aggressive” given the complexities of capital requirements and regulatory hurdles.
Ackman, in his initial X post and subsequent media appearances, has reinforced these concerns, warning that attempting to take the companies public immediately would likely result in a “failed public offering” or a valuation far below their intrinsic worth.
Instead, he argues that relisting the companies first would allow the market to price them accurately. He projects that if the companies launch an IPO in the fourth quarter of 2026, they would only need to raise approximately $30 billion to meet capital requirements — a goal he termed a “highly achievable outcome.”
Ackman’s focus on a 2026 IPO marks a refinement of his earlier commentary on the GSEs. In August, Ackman had publicly supported President Donald Trump’s suggestion of merging Fannie and Freddie into a single entity, which he tentatively dubbed “The Great American Mortgage Corporation.” At the time, Ackman argued that such a merger, combined with an implicit government guarantee to back the companies should they encounter financial hardship, would significantly slash mortgage rates.
If implemented, such a move could potentially end the federal government’s conservatorship of the two GSEs, which occurred during the subprime-fueled financial crisis of 2008. At that time, the publicly traded companies were bailed out by the Treasury Department, delisted from the NYSE, relegated to the over-the-counter Pink Sheets, and put under government oversight.
Ackman is not just providing impartial expert analysis; he has a personal interest in the matter. His hedge fund, which he founded in 2004, holds considerable stakes in both Fannie and Freddie.
While his idea focuses heavily on the mechanics of privatization and taxpayer return, the goal of stabilizing the mortgage market remains central. Ackman argues that his current plan would unlock more than $300 billion in value for the government, calling it “the biggest deal in history.”
Under Ackman’s valuation model, shares of Fannie and Freddie — which currently each trade for around $10 a share on the Pink Sheets — could be valued at $34 a share by the time of an offering in late 2026. The $300 billion federal windfall assumes the government exercises its warrants and executes a gradual sell-down of stock over five years.
This “slow and steady” approach, he contends, would create a massive windfall for taxpayers while avoiding the market shock associated with a premature offering.
“Trump likes big deals,” Ackman noted in his 2024 X post, expressing confidence that the administration will ultimately see the wisdom in delaying the IPO until the companies are sufficiently capitalized.
