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Q3 inflows of $43 billion

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Shares rise in pre-market trading

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KKR earns rising fees for managing assets

(Adds analyst comment in paragraphs 9, 13, updates shares,)

By Isla Binnie and Arasu Kannagi Basil

Nov 7 (Reuters) - KKR reported a rise in

third-quarter profit that beat Wall Street's expectations on

Friday, boosted by strong fundraising, particularly in credit

and its insurance unit.

Adjusted net income of $1.27 billion, or $1.41 per share,

surpassed the $1.17 billion, or $1.30 per share, that analysts

on average had expected from the New York-based alternative

asset manager, according to estimates compiled by LSEG.

Its shares were around 3% higher in pre-market trading as

U.S. stock futures broadly inched lower. KKR's stock has slipped

19% this year.

GUARD AGAINST VOLATILITY

Along with rivals Blackstone, whose assets have

breached the $1 trillion mark, and Apollo, which hopes

to get there by 2026, KKR has added new business lines to grow

beyond the traditional private equity strategy of buying and

selling businesses.

KKR's co-CEOs Scott Nuttall and Joe Bae have set a target

for assets to reach $1 trillion by 2030.

Fee-related earnings rose to $1 billion. Total assets

climbed to $723 billion as KKR hauled in $43 billion in new

capital, driven by $27 billion to credit.

Private equity firms have been all the keener to branch out

as higher interest rates hampered sales of companies they bought

during a long period of lower rates. As exits from investments

through sales or refinancing slowed, so has the return of

capital to investors, some of whom have become reluctant to

commit to new funds.

KKR said on Friday it had raised $17.5 billion for its

latest North America-focused fund, which people familiar with

the matter said was targeting around $20 billion.

Piper Sandler analysts noted KKR's returns from traditional

private equity were 2%, down from 5% in the second quarter.

Meanwhile Global Atlantic, which represents a third of the

firm's assets, saw operating earnings rise 28%.

"Results for alternative asset managers with balance sheets

have demonstrated that the moat created from these businesses

has increasingly immunized against rate volatility," the Piper

Sandler analysts said.

Analysts have been watching the retirement segments at KKR

and Apollo for any signs of strain on profits from selling

annuities, which are sold for a lump sum and guarantee regular

payouts.

KKR also tapped the wealthy individuals whom alternative

investment firms are increasingly targeting. Its K-Series

business offering funds to retail investors grew to $29 billion

from $14 billion a year ago.

Dry powder, or money investors have pledged but has not yet

been used, totaled $126 billion. During the quarter, KKR closed

a deal to buy a majority stake in biopharma royalty acquisition

company Healthcare Royalty Partners, and a $2 billion investment

from Japan Post Insurance Company ( JPPIF ).

After the end of the quarter, KKR teamed up with Apollo to

invest $7 billion in Keurig Dr Pepper ( KDP ).