John Nuveen & Co. reported startingly good earnings in the first half of 1991, with net income increasing more than 53% over the same period last year.

Nuveen brought in $21 million, compared with $13.7 million in the first half of 1990. Income was reported by Nuveen according to generally accepted accounting principles.

Officials at the privately held Chicago-based investment house attributed the earnings growth to the strong new-issue volume in the municipal marketplace and two new divisions that are churning out sales -- the remarketing desk for municipal preferred stock and Nuveen's housing finance department.

Nuveen specializes in selling retail-targeted municipal securities, so this year's impressive issuance volume directly benefits the company. The preferred stock sales, similarly, piggyback on the performance of closed-end municipal funds, one of the most profitable securities in Nuveen's repertoire.

The preferred stock desk typically issues short-term shares in closed-end funds to institutional investors. In essence, Nuveen borrows in the short-term market and buys more long-term bonds for its fund portfolio. Preferred stock sales follow the funds' initial public offerings and are based on the size of the closed-end portfolio.

Although closed-end investors' claims on the funds' assets are subordinated to the preferred buyers, the risks are extremely small and the practice boosts closed-end fund yields. Yesterday, Nuveen announced that it planned to sell $700 million of preferred stock for three different tax-exempt funds.

Nuveen's housing finance department's contribution to first-half earnings has come primarily through underwriting new issues, according to a company spokesman. The department is "relatively new," the spokesman said, with most of the four-member staff being assembled in the last two years.

That Nuveen managed to reap profits in housing-bond underwriting runs counter to the new-issue trend. Through August of 1991, housing volume was off almost 20%, to $7.99 billion from $9.96 billion, according to Securities Data Co./Bond Buyer.

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