PS IV not the "roach motel" after all.

Readers in my age cohort may remember the old commercial for a Black Flag insect trap. "Roaches check in, but they don't check out."

Some hedge funds have been like that of late, dropping redemption "gates," or announcing the suspension of payments. "We'll take your money, but we'll be damned if we'll give it back!"

The Wall Street Journal is reporting this morning, page C1, that William Ackman, principal of the Pershing Square hedge fund group, will soon inform his investors that he'll allow them to withdraw from one of those funds, PS IV, afer all, despite talk last week that he was going to limit such redemptions.

Pershing Square IV was set up to benefit from an expected rise on the price of the stock of Target, the big-box retail chain.

The story quotes Ackman himself, "reached at his office Sunday night," saying that PS IV is down 90% and that is nothing to be proud of. But the story doesn't quote Ackman confirming the gist of what the reporters are telling us, which is that Ackman will be putting $25 million of his own cash into the fund in order to allow it to settle with the impatient, and apparently to reward the patient as well. The specifics are attributed to that old reporter's friend, "a person familiar with the matter."

During the past 13 months, Target's shares have declined in value by 38%. Pershing Square IV has been investing through stock options, not through the shares themselves, and this has had an amplifying effect on the loss.

My hunch, reading the story (and this is ONLY a hunch, a guess, a speculation, call it what-you-will) is that Ackman himself is the "person familiar with the matter." The story reads like a one-interview job to me. At parts of the interview, Ackman probably just said, "now this next bit you can't attribute to me by name" -- while at other parts he said, "now THIS bit is what you should quote me on."

The final graf of the story notes that Ackman's non-Target funds lost betwen 11% and 13% in 2008. Give how disastrous a year it was, that actually sounds like a respectable performance.