Famed investor Bill Ackman expects Trump to privatize Fannie Mae, Freddie Mac

Investing.com -- Fannie Mae and Freddie Mac surged Monday after famed investor Bill Ackman said he expects President-elect Donald Trump to privatize the two government sponsored enterprises, potentially leading to their public listing around 2026. 

Ackman, the billionaire founder of Pershing Square (LON:PSHP) Capital Management, believes Trump will remove Fannie Mae and Freddie Mac from government conservatorship, potentially returning them to private ownership.

"A successful emergence of Fannie and Freddie from conservatorship should generate more than $300 billion of additional profits to the Federal government (this is on top of the $301 billion of cash distributions already paid to the Treasury) while removing ~$8 trillion of liabilities from our government’s balance sheet," Ackman said in a Monday post on X

The two mortgage giants, which fund home mortgages in the U.S., have been under government control since the 2008 financial crisis.

Ackman expects Fannie Mae and Freddie Mac to  emerge from conservatorship in the next two years, potentially leading to their public stock market listing around 2026.

Privatizing Fannie and Freddie, however would likely face scrutiny from Congress and require legislative action.

Federal National Mortgage Association (OTC:FNMA) and Federal Home Loan Mortgage Corp (OTC:FMCC) closed 35% and 3% higher, respectively.