William Ackman fights to free Fannie from feds

TRD New York /
Nov.November 18, 2013 12:40 PM

Pershing Square Capital’s William Ackman is spearheading a push to keep some segments of Fannie Mae and Freddie Mac’s business a private, for profit enterprise in a risky, counter-intuitive move. The move also pits Ackman against the Obama administration, which has moved to “wind down” the government sponsored enterprises’ business.

Pershing, Ackman’s $12 billion hedge fund, acquired a 9.98 percent stake in the common shares of Fannie Mae and a 9.77 percent stake in those of Freddie Mac last week. Now, Ackman hopes to begin talks with the government and shareholders to privatize the two GSEs, which began making a profit in 2012, despite needing a taxpayer bailout just two years earlier. When the feds took over Fannie Mae and Freddie Mac, many thought the securities they held were of little value, but hedge funds and private equity firms have recently begun turning profits on the once-toxic assets, Bloomberg News reported.

The U.S. Treasury Department last week said it wanted to wind down Fannie and Freddie.

Experts told Bloomberg News that Ackman’s proposal was unconventional, but might pay off.

“It’s risky as the odds are stacked against these investors in the short-term,” Nela Richardson, senior economist with Bloomberg Government, told Bloomberg News. “This is the biggest hot-button issue after Obamacare and there’s little chance of reform now. However it may pay off in the long term for the investors.”

An investor group led by Ackman purchased the so-called Winter Garden penthouse condominium at One57 for over $90 million in May, as previously reported. [Bloomberg News]Mark Maurer


Related Articles

arrow_forward_ios
The 30-year fixed-rate mortgage averaged 3.07 percent for the week ending July 2 (iStock)

Mortgage rates hit all-time low

Mortgage rates hit all-time low
Freddie Mac of Debby Jenkins (Freddit Mac, Getty)

Freddie Mac extends multifamily loan forbearance relief to landlords

Freddie Mac extends multifamily loan forbearance relief to landlords
Federal Housing Finance Agency Director Mark Calabria (Photo by JIM WATSON / AFP)

Fannie, Freddie will buy loans in forbearance — for a pricey fee

Fannie, Freddie will buy loans in forbearance — for a pricey fee
FHFA Director Mark Calabria (Photo by Zach Gibson/Getty Images)

Fannie, Freddie consider buying home loans in forbearance amid liquidity crunch

Fannie, Freddie consider buying home loans in forbearance amid liquidity crunch
Freddie Mac CEO David Brickman

Freddie Mac extends loan forbearance period on multifamily landlords

Freddie Mac extends loan forbearance period on multifamily landlords
FHFA Director Mark Calabria (Photo by Zach Gibson/Getty Images)

Fannie, Freddie offer multifamily landlords a break — strings attached

Fannie, Freddie offer multifamily landlords a break — strings attached
The 30-year fixed-rate average fell to 3.45 percent (Credit: iStock)

US mortgage rates hit 3-year low

US mortgage rates hit 3-year low
Ex-Fannie Mae employee in LA sentenced in bribery, kickback scheme

Ex-Fannie Mae employee in LA sentenced in bribery, kickback scheme

Ex-Fannie Mae employee in LA sentenced in bribery, kickback scheme
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...