Source: Future Atlas.

Bill Ackman's Pershing Square Capital has a big stake of Fannie Mae (OTC:FNMA) and Freddie Mac (OTC:FMCC). His firm announced a nearly 10% stake in both government sponsored entities just one week ago.

Ackman is doing it differently, buying the common stock and not the preferred stock like fellow fund manager Bruce Berkowitz.

A look back at Fannie and Freddie
In 2011, Bill Ackman was invited to discuss the credit markets on CNBC. There, he joined Clayton Rose, a then-board member of Freddie Mac.

The discussion turned interesting when the two discussed the board's role at Freddie Mac.

Ackman asked who the board represents. He questioned, "Who are you a fiduciary for? The shareholders?"

Rose said, "Our fiduciary duties run strictly to the conservator."

Ackman became more pointed with his questions, "So you can make decisions that are adverse to shareholders?"

Rose replied, "Correct."

This was a huge story at the time, covered by Dealbook and others. Today, it's mostly forgotten as people think about the riches that could be had if Fannie and Freddie were returned to public hands.

But it makes me wonder why exactly Ackman would announce such a large stake in Fannie and Freddie just two years after a Freddie Mac board member said, on national TV, that Freddie Mac was run for the government, not the shareholders.

A financial chess game
Ackman is working with Berkowitz to put Fannie Mae and Freddie Mac back in private hands. But the problem, just as it has always been, is who the Fannie Mae and Freddie Mac board members really work for.

If they work for the government -- if they have a duty to make decisions in the best interest of the government -- then releasing Fannie Mae and Freddie Mac to private investors seems absolutely backwards. In Berkowitz's plan for the GSEs, the U.S. Treasury would have to give up its net sweep agreement that sends virtually all of the GSE's positive net worth balance at the end of every quarter back to the U.S. Treasury.

Secondly, if Fannie and Freddie are sold to private shareholders, how could it possibly be in the best interest of the U.S. government?

Just by virtue of the financial markets, it's impossible to see how a private party could provide a price reasonable to buy Fannie or Freddie from the government. Finance 101 tells us that U.S. Treasuries are a risk-free investment. The government can literally print money. It has the lowest cost of capital in the world -- practically free.

No private investor has that luxury, and thus, the GSEs are inherently worth more to the U.S. government than they are to private shareholders. No board member who has a fiduciary duty to the U.S. government could support giving Fannie or Freddie back to private shareholders.

A political mess
The good news for the small shareholder in Fannie and Freddie is that fund manager participation ensures this will not go down quietly. Berkowitz has nearly $1.5 billion invested in preferred shares of Fannie Mae. Ackman has about half a billion dollars in play when you combine his stakes in Fannie Mae and Freddie Mac common stock.

What concerns me, though, is that Ackman and Berkowitz are entering this trade after some of their worst years on record. Ackman's short thesis on Herbalife is getting crushed by a robust bull market while he walks away from a huge losing trade on J.C. Penney. Berkowitz's funds had a miserable year in 2011, and investors fled. Were it not for a huge concentrated bet on AIG, Fairholme's recent performance would still be lagging the market.

To an outsider, it almost appears that the two see this as their "get-even" trade, whereby they commit a small amount of capital with the hopes of knocking it out of the park and papering over recent poor performance. I fear many smaller investors are doing the same, looking for a big multi-bagger while accepting the risk of complete and total capital loss should the U.S. government keep control of Fannie Mae or Freddie Mac -- or both.