Ackman’s Hedge Fund for Target Stake Fell 68% in 2008

Bloomberg – William Ackman’s hedge fund that invests in Target Corp. fell 68 percent last year, more than double the loss by the second-largest U.S. discount chain.

Pershing Square IV declined 7.7 percent in December alone, according to a letter to investors from Pershing Square Capital Management LP. Ackman and Pershing spent about $2 billion in 2007 for a stake in Minneapolis-based Target. Ackman has since pressed Target to buy back shares, sell its credit-card unit and extract more value from its real estate.

Ackman, who controls 9.5 percent of Target, proposed last year that the company place the land under Target stores into a real estate investment trust that would lease the property back to the retailer. The New York-based investor has argued that such a move would free up cash for the company and result in a higher valuation.

Pershing Square IV’s loss last year followed a decline of 43 percent in 2007. The fund is structured so its returns to investors double the stock’s movement.

Ackman didn’t return messages seeking comment.

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