Commonly Asked questions about PSIVWill you be able to meet all redemptions in cash?
Yes, we expect to be able to meet all redemptions in full and in cash.
Does an investor need to withdraw from PSIV in order to recognize a tax loss onhis/her initial investment?
A sale and repurchase of options which are sufficiently different from the optionspreviously owned by the fund is a tax realization event. As such, an investor willget the benefit of tax loss recognition whether or not that investor withdraws fromPSIV. Please consult your own tax advisors regarding your particular taxtreatment.
If an investor wishes to add capital to or exit PSIV, when would the transactionstake place?
We expect to make distributions of 95% of withdrawing capital in March with thebalance after the completion of audited financials. Additions of capital will beaccepted contemporaneously with distributions of capital. We will providefurther details when they are available.
When will documents be distributed?
Redemption and subscription documents are currently being prepared and will bedistributed as soon as they are available.
Will new investors in PSIV dilute existing investors’ ownership in any way? WillPSIV impose a cap on new capital, to the extent necessary to fund redemptions byexisting investors?
If we receive more new commitments than withdrawals we will likely add to ourTarget position to minimize the potential for dilution. We do not intend to imposea cap on new capital.
Your letter does not seem to address the fact that TGT’s management has publiclydismissed a real estate transaction. Does Pershing Square believe that a transactionis nonetheless a possibility?
Yes. In some of our past engagements – for example with McDonald’s andWendy’s – our initial overtures and proposals to the companies were rebuffed.Ultimately, we were successful when the power of logic prevailed or alternativelya modified version of our transaction structure was developed either by us,management, or by working together with management and its advisors to arrivePage 3 of 4