In his most recent letter to investors Bill Ackman, founder of Pershing Square Management, put his bet on a J.C. Penney Company, Inc. (NYSE:JCP) revival firmly in the “mistake” column. The hedge fund manager owns more than 17% of the struggling retailer, and the company’s price has continued to fall since he bought in.

Bill ackman

According to the manager’s letter, J.C. Penney Company, Inc. (NYSE:JCP) shares are more than 40% less valuable than the average cost of Pershing’s buys. Under a section in the letter called “Mistakes,” Ackman lists the bet on the retailer. The manager is still confident that the company will recover, the problem, according to the letter, is that it is difficult to tell when that will happen.

J.C. Penney boardroom battle

The battle for control at J.C. Penney Company, Inc. (NYSE:JCP) has been raging for some time. Ackman’s resignation from the company’s board was the most dramatic incident in the company in recent weeks. Last week the hedge fund manager resigned from the board after disputes with other directors about the future of the company.

There’s a lot of really positive interest in J.C. Penney in the hedge fund world, but Bill Ackman appears to be the biggest holder of the stock. Other hedge fund managers with a stake in the retailer include George Soros, and Kyle Bass, who recently bought a bunch of the company’s secured debt.

Ackman returns

Bill Ackman, despite losses at J.C. Penney Company, Inc. (NYSE:JCP) still did alright in the first half of the of the year, but lagged the market in the period. In the quarter returns net of fees ranged from 5.3 to 6.3 percent in the quarter. In the same period the S&P 500 gained more than 15%.

Ackman is not hurting investors too hard with this bet yet, though he is in the midst of another long battle at Herbalife Ltd. (NYSE:HLF). With two big bets running against him, it would be interesting to see Pershing returns without those two bets. Ackman listed his bet that Herbalife is a failing company under the ‘difficult to determine’ column in the letter.

Ackman seems sure that if he holds on long enough a government agency will come knocking at the Herbalife Ltd. (NYSE:HLF) agency. He also seems sure that J.C. Penney Company, Inc. (NYSE:JCP) will turn itself around, he’s just not sure about when.