Jan. 5 (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.

Target announced a $10 billion share repurchase program in November 2007 and sold almost half of its credit-card portfolio to JPMorgan Chase & Co. for $3.6 billion last year.

Target rose $1.51, or 4.4 percent, to $36.14 at 4:15 p.m. in New York Stock Exchange composite trading. It fell 31 percent last year, compared with the 38 percent decline by the Standard & Poor’s 500 Index.

To contact the reporters on this story: Joshua Fineman in New York at jfineman@bloomberg.net; Lauren Coleman-Lochner in New York at llochner@bloomberg.net.

Last Updated: January 5, 2009 16:24 EST