Pershing Square's Hedge Fund Set-Up For Target (TGT) Dropped 68%

Pershing Square's William Ackman’s hedge fund that was established to invest in Target Corp. (NYSE: TGT) fell 68% last year, more than double Target's actual loss.

In just December, Pershing Square IV declined 7.7%, according to a letter to investors from Bill Ackman. Bloomberg reported that Ackman and Pershing spent about $2 billion in 2007 for its stake in Target. Since that time, Ackman has pressed Target to increase shareholder value. He wanted Target to buy shares back, sell its credit-card unit and extract more value from its real estate holdings.

In 2007, Pershing Square IV loss approximately 43%. This particular fund is structured so its returns to investors double TGT's actual movement.

Target did make some of Ackman's suggested moves, such as announcing a $10 billion share buyback program in 2007 and sold almost 50% of its credit-card portfolio to JPMorgan Chase & Co. for $3.6 billion last year.

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Target Corporation (Target) operates general merchandise and food discount stores in the United States, which include Target and SuperTarget stores.

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