NEW YORK ( TheStreet) -- Hedge fund manager Kyle Bass gave up his wager on Fannie Mae ( FNMA)and Freddie Mac ( FMCC) preferred stock earlier this year when he concluded that both Republicans and Democrats "wanted them dead," he told TheStreet in a brief email exchange Friday. The investor, who runs Dallas-based Hayman Advisors, touted the investment at the Skybridge Alternatives investor conference in Las Vegas last year, saying it "could be an eight to 10-bagger from here." Bass was one of a handful of hedge fund investors who believed the preferred shares would recover at least some of their value on the theory the government sponsored enterprises would return to profitability and repay the U.S. Treasury's roughly $400 billion in assistance. Freddie Mac "Z" preferred shares (FMCKJ), one of the most actively traded issues, were worth roughly $2.50 each when Bass made his comments in May 2011. They closed at $2.83 on Thursday, but fell more than 60% Friday after the Treasury announced a plan to accelerate the wind-down of the GSEs. Issued in November 2007 at $25.55, they haven't paid a dividend since the government put them into conservatorship during the 2008 mortgage crisis. "We no longer have a position in the Fannie and Freddie preferreds. Earlier this year, we elected to sell them when we determined that both sides of the isle wanted them dead. That's all I have to comment on," Bass wrote. Another investor in the preferred shares, who spoke on the condition that he not be identified, said he reduced his position in GSE preferred shares following the selloff Friday because they caused "too much volatility" in his portfolio. The investor still believes the mortgage giants will fully repay the Treasury on its loans, and that excess profits could be paid out to preferred shareholders. -- Written by Dan Freed in New York. Follow this writer on Twitter.