Overview
Freddie Valuation Challenges
Pershing Square’s January 2025 presentation valued Fannie Mae at roughly 15.0x earnings and Freddie Mac at 14.5x. Its November 2025 relisting presentation moved Fannie up to 16.0x and Freddie down to 13.0x. The businesses did not suddenly become three turns apart, and the operating record points the other way.
The same business deserves the same multiple. On the evidence, Freddie may deserve more.
Presentation
Freddie Mac Slide Presentation
The full 19-slide valuation analysis behind the argument above. Use the arrows inside the viewer to move through the deck, or download it to read offline.
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Summary
Freddie At a Glance
Why we reject Pershing Square’s lower Freddie multiple. Pershing values Fannie at 16x earnings and Freddie at 13x. We kept its Freddie earnings estimate and changed nothing except the multiple. That one assumption moves a very large amount of value.
- +$10.18Per-share difference versus Pershing’s 13x value
- ~$32.9BFully diluted gap, using ~3.234B FMCC shares
- 3 turnsMultiple gap, 16x versus 13x
Freddie does not belong at 13x
Start with the numbers: the operating record does not support a three-turn gap.
- $7.4BH1 2026 net income for Freddie. Fannie reported $7.7B
- 12.3%Capital efficiency, Freddie Q1 annualized calculation
- 52%2026 issuance, Freddie share. Fannie 48%
The earnings are nearly the same
Fannie earned $7.7 billion in the first half. Freddie earned $7.4 billion. We adjust for reserve movements. Even after that, the three-turn gap does not make sense to us.
Do not overlook the fintech asset
Each company owns half of Common Securitization Solutions. Freddie has fewer shares outstanding. Its shareholders should get full credit for Freddie’s half of that asset.
Freddie now leads new issuance, earns about as much as Fannie and operates under the same regulator and capital rules. Anyone arguing for a lower multiple should have to prove the case.
Capital-efficiency note: Oksenholt calculation annualizes Freddie’s Q1 2026 net income of $3.558B and divides it by average required CET1 of approximately $115.5B, based on $114B at Q4 2025 and $117B at Q1 2026. Result: 12.32%, rounded to 12.3%. This is not a company-reported ROE measure.
The Freddie discount widened
Pershing’s own numbers show the gap moving sharply against Freddie during 2025.
FNMA (Fannie Mae)FMCC (Freddie Mac)
In January, Pershing used 15.0x for Fannie and 14.5x for Freddie. By November, Fannie had moved up to 16x while Freddie had fallen to 13x. A half-turn difference became three turns.
Metric note: Pershing’s January terminal multiples were 15.0x FNMA 2035E EPS and 14.5x FMCC 2035E EPS. The same pages also showed 15.9x FNMA 2027E EPS and 14.6x FMCC 2028E EPS. These are different rows and should not be mixed.
Relisting is only the first step
Freddie must not be marked down before the future is decided. We support the administration and FHFA as they strengthen both companies and work toward ending the Net Worth Sweep and conservatorship. But Freddie’s value cannot be an afterthought.
“I am excited to spend even more time on Fannie Mae and Freddie Mac, as the companies continue the historic ascension under President Trump.”William J. Pulte, Chairman of Fannie Mae and Freddie Mac, August 1, 2026
If the companies stay separate
Value them on the same basis unless the results clearly justify doing otherwise.
If the companies are combined
Establish each company’s standalone value first. Then share the savings created by the merger.
Primary sources: Pershing Square, Fannie Mae and Freddie Mac presentation, 16 January 2025, pp. 88–89 and 94; Pershing Square relisting presentation, 18 November 2025; Fannie Mae and Freddie Mac Q1/Q2 2026 results; FHFA issuance data; CSS corporate information; William J. Pulte post on X, 21 January 2026. For calculations, qualifications and complete source links, see the Oksenholt Capital Freddie Mac Valuation Analysis.
Oksenholt Capital Management LLC · Illustrative only · Not investment advice · DYOR
In the news
City Office REIT
In October 2025, CRE Daily reported that Oksenholt Capital Management had publicly opposed the proposed take-private of City Office REIT, arguing that the offer materially undervalued the company and had been reached without a competitive bidding process.
City Office REIT shares had fallen from a 2022 high of $21.24 to $5.57 by July 2025, erasing more than $600 million of market capitalisation. Oksenholt Capital, which holds a position in the company, characterised the transaction with the Elliott-affiliated bidder as a liquidation sale rather than a sale process run for shareholders, and put its own estimate of book value at roughly $15 per share.
- $21.24 → $5.57Share price, 2022 peak to July 2025
- >$600MMarket capitalisation erased
- ~$15Book value per share, per Oksenholt’s analysis
- $2–$7MAnnual savings identified
What Oksenholt Capital called for
- 01An open, competitive bidding process in place of privately negotiated terms.
- 02New independent directors appointed to the board.
- 03US-based leadership, and a wind-down of the Canadian operations.
- 04Leasing brought in-house, with reduced reliance on third-party vendors.
- 05Stronger asset-level marketing, and a strategic restructuring to close the gap to book value.