Fannie Mae / Freddie Mac FNMA / FMCC
Release Fannie and Freddie from conservatorship at a 2.5% capital standard and IPO them at ~$30+/share; Treasury's warrants generate ~$300bn while shares re-rate 5-6x from ~$6 today.
Thesis
Fannie Mae and Freddie Mac have been in government conservatorship since 2008 and now hold $131bn of retained capital, enough to stand alone. Pershing Square argues FHFA's 2020 capital rule of 4% is impractical — it would tie up ~$100bn of wasted capital and force g-fee hikes that effectively tax American homebuyers. A 2.5% standard, benchmarked against banks and private mortgage insurers, gives the GSEs $286bn of Claims Paying Resources, more than 10x their actual 2007-2011 losses excluding subprime and Alt-A. The four-step framework: set 2.5% capital, strip government-granted benefits, install market-based governance, clarify the backstop. Fannie IPOs in 2026 at ~$32/share and Freddie in 2027 at ~$34, re-rating to ~$35 and ~$39 at full recapitalization versus ~$6 today. Treasury's 79.9% warrants could deliver ~$300bn to taxpayers. The incoming Trump administration has a four-year runway to act.
SCQA
Fannie Mae and Freddie Mac are GSEs guaranteeing ~$7.6 trillion of US single-family mortgages, operating in government conservatorship since 2008 and now holding $131bn of retained capital.
FHFA's 2020 capital rule of 4% is impractical — it would tie up ~$100bn of wasted capital, force g-fee hikes that tax homebuyers, and make a private recapitalization uneconomic.
Set capital at 2.5%, strip non-vital government benefits, IPO Fannie in 2026 and Freddie in 2027, and treat Treasury's Senior Preferred as repaid rather than convert it to common.
Fannie could be worth ~$35/share by YE 2026 and Freddie ~$39 by YE 2027 — versus ~$6 today — while Treasury's warrants generate ~$300bn for taxpayers, more than all other bailout profits combined.
The three reasons
- 1
A 2.5% capital rule gives GSEs a fortress balance sheet with 10x actual 2007-2011 core losses
- 2
Treasury's 79.9% warrants could generate ~$300bn for taxpayers — more than all prior bailouts combined
- 3
Fannie worth ~$35 by YE 2026, Freddie ~$39 by YE 2027 — vs. ~$6 today
Primary demands
- Release Fannie and Freddie from FHFA conservatorship via Treasury/FHFA action (no Congress needed)
- Set minimum capital requirement at 2.5% (vs. FHFA's current 4% rule)
- Limit non-vital government-granted benefits (SEC exemption, UST $2.25bn line, Volcker exemption, FSOC exemption)
- IPO Fannie Mae ~$5bn in 2026 and Freddie Mac ~$15bn in 2027
- Treat Treasury's Senior Preferred Stock as repaid — do NOT convert into common equity
- Exercise Treasury's 79.9% warrants and monetize over time to generate ~$300bn for taxpayers
KPIs cited
Pattern membership
Precedents cited
- GGP 're-IPO' 2009-2010 (Pershing/Fairholme/BAM)
- AIG, GM, Citi, BofA, JPM, Wells Fargo, Chrysler bailout recoveries
- Saudi Aramco, Alibaba, SoftBank, AIA, Visa, GM, Facebook IPO precedents
Composition what's on the 104 slides
Slide gallery ·
Notes
Cover titled 'The Art of the Deal' — framed explicitly as a pitch to the incoming Trump administration, closing with a Trump 'Art of the Deal' quote. Long-running Pershing Square position (Ackman public on FNMA/FMCC since ~2013); this 2025 deck is policy advocacy toward Trump Treasury/FHFA rather than corporate activism. Disclaimer confirms 'Funds managed by Pershing Square and its affiliates own shares, predominantly common stock' but no percent stake disclosed. Four-step framework (capital / benefits / governance / backstop) is the structural spine. Heavy use of authority quotes (Greenspan, Buffett, Mortgage Bankers Association, KBW, Cato Institute, amicus briefs) for credentialing. Implicit villain is FHFA's 4% capital rule and the 2012 Net Worth Sweep, not a named individual. Watermarked '10XEBITDA.com' throughout (third-party redistribution); authorship unambiguously Pershing Square. No named author on cover — hence author_name null.