06/01/2010 11:16 am ET | Updated May 25, 2011

Hedge Funds Post BIGGEST Losses Since Lehman, Paulson Drops 6.9%

Hedge funds lost an average of 2.7 percent through May 27, according to the HFRX Global Hedge Fund Index, as the sovereign debt crisis in Europe triggered declines in stocks, the euro and commodities, and the gap in yields between U.S. short-term and long-term debt narrowed. It was the biggest decline since November 2008, when hedge funds lost 3 percent in the wake of Lehman Brothers Holdings Inc.'s bankruptcy two months earlier.