Bill Ackman, chief executive of hedge fund Pershing Square has speculated on X that Fannie Mae and Freddie Mac could come out of conservatorship within the first two years of the coming Trump administration.
“During Trump’s first term, Secretary Mnuchin took steps toward this outcome, but he ran out of time,” Ackman wrote. “I expect that in the second [Donald Trump] administration, Trump and his team will get the job done.”
In September, The Wall Street Journal reported that former Trump administration figures and bankers have discussed how to end the conservatorship since spring.
Saying “one investment in our portfolio stands out for large asymmetric upside versus downside,” Ackman noted that Pershing has owned stock in both for the last ten years. He estimated that the two successfully coming out of conservatorship “should generate more than $300 billion of additional profits to the Federal government” on top of $301 billion already paid to the Treasury. The move would also remove about $8 trillion of liabilities from the government’s balance sheet.
The second part would set their capital at 2.5% of outstanding guarantees, Ackman said, calling it “a true fortress-level balance sheet.” It would favorably compare to the capital ratios required of mortgage insurers that guarantee only the first 20% “on often riskier mortgages with less creditworthy borrowers” versus stronger GSE positions.
If there were an IPO in the last quarter of 2026, the two companies would need to raise $30 billion for the 2.5% capital standard, which Ackman calls a “highly available outcome.” He also estimates that IPOs would be priced at about $31 a share while the actual value would be about $34 a share.
“There remains a high degree of uncertainty about the outcome so you should limit your exposure to what you can afford to lose if you choose to invest,” he added.
Mark Calabria, former head of the Federal Housing Finance Agency (FHFA) under Trump, agreed that the President-elect would try to influence a return of the two to private status, as Housingwire reported. He also said, speaking during a Community Home Lenders of America (CHLA) event in Washington, D.C, that it would take several years to accomplish.
He added, “And so, if you start from the premise of ‘Congress is unlikely to do anything,’ then what do you have to do? There’s nothing about the conservatorship that changes the implied guarantee. Despite what maybe some people in capital markets may believe, there’s no guarantee in conservatorship; there’s no guarantee out of conservatorship.” Calabria also estimated that by 2027, the chance of bringing the two entities private again was 75%.