The hedge fund run by activist investor William Ackman said on Monday it now owns a 9.6 percent stake in Target Corp., adding the discount retailer to its small list of closely watched investments.

Ackman's New York based fund firm Pershing Square Capital Management, which gained prominence for forcing change at a number of high-profile American companies, began buying shares in the Minneapolis-based retailer in April.

Pershing Square was able to build the position quickly after another large investor sold, someone familiar with the matter said. As required by law, Ackman disclosed the stake in a filing with U.S. financial regulators on Monday.

Until recently, Target's biggest institutional investors have included Capital Research & Management, which runs the popular American Funds, and State Street Global Advisors and AllianceBernstein.

In the last 52 weeks Target's share price has climbed roughly 45 percent, and it was bumped up about 7 percent late last week amid mounting speculation that Ackman had set his sights on the retailer, which features goods from prominent designers like Isaac Mizrahi for low prices.

Target is currently trading at roughly 19 times future earnings, below the industry average of 24 times expected earnings and competitors like Family Dollar Stores and Big Lots.

While Ackman is best known for long-running battles waged against McDonald's Corp. and Wendy's where he pressured management to sell off its Tim Hortons coffee shop chain to boost value for shareholders, he also makes investments where he does intend to push for change, immediately.

Ackman is also currently facing off with human-resource and payroll company Ceridian Corp. where he said he can come up with a better deal than the $5.3 billion takeover bid management hammered out.

Also in an unusual twist for hedge fund investments, Ackman wrote that he plans to donate a large chunk of the profits from the Target investment to the Pershing Square Foundation, which focuses on education, health care, and human rights among other things. He launched the foundation last year with $10 million.