Fannie Mae-No Politics (FNMA)

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As Pershing Square’s GSE ‘Bet’ Craters, Reports Surface that Investors are Pulling Money Out

Thursday April 5, 2018 ...By Hack Fishwrapper writer - Paul Muolo ...



Pershing Square Capital is now sitting on huge paper losses tied to its investment in Fannie Mae and Freddie Mac common and listed the GSEs as “negative contributors” to the fund’s performance last year.

But the news is getting even worse for Pershing Square. Late Wednesday, The Wall Street Journal reported that investors are now pulling money out of the fund at a “rapid pace.”

The investment in Fannie and Freddie was not cited as a reason for the redemptions. However, Fannie’s common now trades for $1.49 a share, Freddie $1.41. Pershing Square owns roughly 9.9 percent of each.

Under Bill Ackman’s leadership, Pershing Square bought its stake in the mortgage giants earlier in the decade at an average price of $2.14 (for Freddie) and $2.30 (Fannie).

In its annual report to shareholders, the fund blamed the drop in GSE shares on the Trump administration and Congress taking its eye off the ball in regard to housing finance reform.