Ackman backs Fannie and Freddie with 10x return call
Bill Ackman, founder of Pershing Square Capital Management, has publicly labelled Fannie Mae and Freddie Mac "stupidly cheap," arguing the two government-sponsored enterprises represent one of the best buying opportunities he has seen in years. Shares in both entities surged more than 30% in response to the comments, according to Bloomberg and Forbes.
Ackman broadened his remarks to encompass high-quality US equities more generally, telling CNBC it is "one of the best times in a long time" to buy, citing market weakness linked to geopolitical uncertainty surrounding the Iran conflict as the catalyst for what he views as mispricing.
The Fannie-Freddie call has drawn notable support from Michael Burry, the investor whose subprime short position was chronicled in "The Big Short." Burry has aligned with the core thesis, though he has also warned investors that a formal IPO or privatisation of the two mortgage giants is unlikely to materialise before at least 2027, a timeline that would extend the holding period for any position premised on a capital event.
Fannie Mae and Freddie Mac have been under US government conservatorship since 2008. Their privatisation has been discussed intermittently across multiple administrations without resolution, making the timeline risk a central variable for anyone sizing a position on Ackman's thesis. Burry's 2027 floor, if accurate, implies investors must be comfortable with an extended wait before any liquidity event crystallises the embedded value Ackman identifies.
