Fannie Mae (FNMA) and Freddie Mac (FMCC) -- Path to Privatization and Significant Upside | Pershing Square 2024 Q4

Increased Probability of Exiting Conservatorship

Apr 13, 2025

Summary

President Trump committed to privatizing Fannie and Freddie.
Net worth sweep suspended, allowing for earnings retention.
Potential for 5x to 6x upside in shares over the next two to three years.

Fannie Mae (FNMA, Financial) and Freddie Mac (FMCC) were discussed in Pershing Square's Q4 2024 letter for their increased probability of exiting conservatorship following President Trump's victory. The President has publicly committed to privatizing these entities, with meaningful progress made during his first term. The net worth sweep was suspended, allowing for earnings retention, and there is a clear path for Fannie and Freddie to become fully recapitalized and exit conservatorship within the next two years.

"We believe the likely privatization path will result in 5x to 6x upside for FNMA and FMCC shares in two to three years..." — Pershing Square 2024 Q4 Fund Letter

Read full letter at gurufocus Pershing Square 2024 Q4 page.

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