(The Wall Street Journal) -- New academic research suggests that some hedge fund managers may cherry-pick flattering prices when valuing securities that don't actively trade in an effort to improve the performance of their funds.

Investors should take heed because this massaging can help make the difference between a winning or losing month, the research found. For hedge fund managers, such statistics on the number of winning and losing months have grown increasingly significant as the number of hedge funds has exploded - to more than 7,500 - and managers vie to attract and retain investor capital.