During 1999, financial advisers recommended more of our products to their affluent and high-net-worth clients than ever before. This response by our customers, along with our record financial results for the year, confirms the long-term growth potential of the Nuveen franchise.

We achieved this, in part, by successfully managing our traditional fixed-income business through a challenging interest rate environment, and maintaining our enduring commitment to the highest quality performance throughout market cycles. Even more importantly, we did this by acting swiftly to exploit several emerging trends in our markets that enabled us to accelerate the pace of development in several strategically important new businesses. These new businesses broaden substantially the range of equity-based products and services we offer.

Individual Account Management
One of our most promising new equity-based businesses is providing financial advisers with customized individual account management for their high-net-worth clients. Financial advisers are increasingly attracted to individual account management as their clients assets grow to more significant levels. Investors also appreciate the greater tax efficiency that can be gained from individual account management. Sales of our Rittenhouse and Nuveen managed accounts totaled over $7 billion last year, double their combined annual rate when we acquired Rittenhouse just over two years ago. The key to our success and dramatic growth in this business is a strong consultative sales approach in support of advisers who prefer fee-based rather than commission-based client relationships.

Structured Investments
Our Structured Investment Group led the way in new product development during 1999. We introduced a total of 17 new defined portfolios, complementing the 10 sector portfolios we introduced in the fourth quarter of 1998. New products helped increase our defined portfolio sales over the prior year by more than 200%.

The performance of many of our defined portfolios has been nothing short of spectacular. Five of the ten sector portfolios introduced in October of 1998 had outperformed 95% of all equity mutual funds through the end of 1999. An equal investment in all ten portfolios over this 15-month period would have produced a total return of 137%.

A second component of our Structured Investments business is Exchange-Traded Funds. During 1999, we successfully launched four new funds that are now listed on the New York Stock Exchange. Our total exchange-traded fund sales in the primary market exceeded $2.7 billion. Secondary market trading in Nuveen's exchange-traded funds now exceeds $5.0 billion annually. With nearly $30 billion in exchange-traded fund assets under management, we began taking steps at the end of the year to extend this business into a leadership position in equity-based exchange-traded funds.

Portfolio Management and Research
Our success in developing all of these important new businesses has been enabled by the rapid progress we've made in adding top quality investment expertise to our firm. During the second half of the year, we welcomed a new senior loan research and investment team led by Jeffrey Maillet, one of the most respected and experienced senior loan managers in the country. The Nuveen Senior Loan investment team is already responsible for two portfolios of nearly $400 million.

Earlier in the year we also welcomed Eugene Peroni, a nationally recognized equity market strategist, and we strengthened our team of equity analysts who work with Gene to better develop new sector defined portfolios. Gene's annual Top Ten Picks have generated a cumulative return of more than 1,000% over the last ten years while the DJIA gained approximately 450% for the same period. Gene's leadership is also reflected in his dedication to working closely with our adviser customers.

In December, Columbus Circle Investors joined our team to sub-advise the new Nuveen Innovation Fund and the Nuveen International Growth Fund. Columbus Circle has generated industry-leading results in both technology and international portfolio management for institutional investors. We are pleased to bring their expertise to the financial advisers that we serve.

Each of these additions complements the strong base of investment managers already in place for us at Nuveen, Rittenhouse and Institutional Capital.

Investing in the Nuveen Brand
We've made significant progress in transforming our Company while adhering to our heritage of providing high quality investments and services. This guiding principle has provided a strong foundation for the evolution of the Nuveen brand. Throughout 1999 we prepared to relaunch the Nuveen brand to reflect our clarified mission to be a premier investment manager offering a broad range of investments and services to meet the diverse needs of financial advisers who serve affluent and high-net-worth investors.

Our new brand name — Nuveen Investments — dedicates the entire Company to our singular focus. Our new logo unites the Nuveen name with the international symbol for infinity. The 'N-finity' connects our identity with the growing recognition by investors that well developed investment plans and portfolios need to consider a time horizon that extends far beyond the traditional life-stage horizon incorporated into an individual's asset allocation. The most successful advisers we work with are raising the level of their dialogue with clients, and the nature of their relationships with them. The dialogue is being elevated to encompass an expanding range of family and multi-generational goals and needs. Our repositioned brand also serves to remind financial advisers that our investments withstand the test of time, and that our Nuveen Investments should be considered core holdings in their clients portfolios.

The new theme that supports our brand — Invest Well. Look Ahead. Leave Your Marksm encourages a thoughtful, long-term approach to investing. It strikes a note of optimism about the amazing possibilities that lie ahead, and it encourages financial advisers and investors to reflect upon the opportunities as well as the responsibilities to leave their mark, to use wealth to benefit future generations of their families as well as their communities. We're dedicated to enhancing the continuous dialogue between advisers and their clients on the many aspects and dimensions of managing a family's collective relationship with its wealth.

A New Century of Opportunity
We see an important role for our Company as we look across the vast expanse of a new century. The 21st century begins during a period of unprecedented wealth creation, driven by peace throughout most of the world, the twin triumphs of freedom and democracy, and the accelerating impact of extraordinary technological advances.

In America, this new wealth phenomenon is combined with another unprecedented development, the incredible transfer of wealth from institutions to individuals and families. We now are witnessing the transfer of wealth from federal, state and local governments, from corporations large and small, to individuals and families.

Today, three generations of investors — grandparents, parents and young investors coming of age in an affluent society — have the opportunity to influence the course of history as we start the new century. How individuals and families manage the wealth of a lifetime, the collective wealth of our nation, will help to shape our future in so many ways.

We, together with the financial advisers that we support, have the opportunity to provide valuable services to these investors. We approach this challenge with eagerness and anticipation. We have a clear and focused mission, to rapidly become a premier investment manager. Our objective is to provide exceptional value to financial advisers who build and manage the wealth of affluent and high-net-worth investors. We have a customer-centered strategy to guide our resource commitments and help us achieve our mission. We're confident that success in partnering with our adviser customers will translate into continued strong sales, revenue and earnings growth, as well as substantial returns for our Company's shareholders.

Our ability to achieve our ambitious plans, as always, remains in the hands of those within our Company who manage the investments, develop our programs and products, maintain the systems and serve the advisers of affluent and high-net-worth investors. We're proud of their professionalism, expertise and commitment. And we're most appreciative of the advisers who have shown their loyalty and confirmed that our strategic direction is on target.

We're confident that in the future amazing things will happen!

Sincerely,