For the second straight year, activist hedge fund manager William Ackman’s bet on Target Corp. has failed to pay off spectacularly.

Pershing Square IV, which invests exclusively in the Minneapolis-based retailer, with two-times leverage to boot, lost 68% last year. Target stock, which lost 31% on the year, was not buoyed by any Christmas optimism, sending PSIV down a further 7.7%.

The fund lost 43% in 2007.

Ackman’s New York-based firm, Pershing Square Capital Management, controls 9.5% of Target. The well-known activist has been pushing Target to spin its real-estate holdings into a separate real-estate investment trust. Target has thus far balked at giving up control of the land under its stores, but Ackman has succeeded in campaigns to get the retailer to buy back shares and sell half of its credit-card portfolio.