A Mercury News article (Page 1A, Jan. 14) detailed reasons for the University of California's firing of 11 investment professionals shortly before Christmas 2002. The UC transcript cited in the article implied that UC funds could have earned $4.8 billion more if its equity performance was better from 1992 to 2002.

First the $4.8 billion figure was reached by double counting. Second, according to the published UC Treasurer's Annual Report for fiscal year ending June 30, 2000 (when I retired as treasurer), the annualized equity returns for the trailing 10-year period were 17.4 percent. This compares to the 17.8 percent return for the S&P 500. Since the UC had the right asset mix over the years, its funds achieved near 16 percent annual returns over the 20-year period ending in 2000. These well above average returns allowed the funds to achieve their stated goals handsomely.

It appears that something happened in the two-year period from 2000 to 2002 after the board approved new investment policies and benchmarks in 2000. The board should treat these new returns as distinct and give their new investment policy and benchmarks a full market cycle in order to make a proper judgment.

To fire 11 investment professionals after two years of a bear market coupled with new policies and benchmarks is not professional. They deserve better rhetoric and treatment.

Patricia Small
UC treasurer emeritus