From The Economist – Some revisions may be down to cock-up but a closer look hints at conspiracy. Counter-intuitively, most fixes aim to make performance look worse than originally stated. That is probably because two-thirds of funds charge performance fees only if they are at or above their highest valuations. Eager to bring forward the time when they can charge fees again, such managers have an incentive to belittle past returns. Indeed they are the most avid revisers, knocking an average 0.62% off the numbers.
In contrast, funds with no need to beat past high-water marks typically inflated their first submissions by 0.4%, making them look more successful to prospective backers. The suspicion is that managers are either making phoney corrections, or pushing through legitimate corrections only when it helps.