Pershing Square Misses The Target, Big Time

Feb 9 2009 | 1:11am ET

Not all hedge funds got back on target last month, as it were.

Pershing Square Capital Management’s fund that invests exclusively in Target Corp. securities plummeted another 40.1% last month after dropping 68% in 2008. The fund has lost 89.5% of the $2 billion it raised in 2007.

In the wake of the disastrous performance, the activist hedge fund shop plans to allow Pershing Square IV investors to withdraw what little money they have left in the fund, The Wall Street Journal reports. New York-based Pershing Square originally planned to allow investors to redeem only 15% of their investment.

Still, if founder William Ackman is to be believed, the firm is not giving up on Target.

“While PSIV and Target stock have declined materially, we still believe our fundamental investment case for Target stock will ultimately be realized, although not within the original timeframe we had initially estimated,” Ackman wrote in a Feb. 5 letter to investors.

Risking charges of throwing good money after bad, Ackman himself pledged $25 million of his own money to the fund, and said the firm’s employees and board members will also pony up. He also said he had restructured the fund, investing in longer-dated options that could pay off big if Target shares almost double in price over the next two years.


In Depth

Will Liquid Alts’ Performance Sustain Future Asset Flows?

Aug 25 2014 | 10:34am ET

Liquid alternative investment funds saw the highest percentage of capital inflows...

Lifestyle

Hedgies, Economists and Musicians Mingle At Milkin Mixers In Hamptons

Aug 25 2014 | 6:00am ET

Leave it to Michael Milken to bring some gravitas and sweat to the Hamptons -- along...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.