NEW YORK, July 31 (Reuters) - Investment giant KKR

reported a 9% rise in adjusted net income for the second

quarter on Thursday, bolstered by an increase in fee-related

earnings.

The New York-based firm said its adjusted net income hit

$1.1 billion, or $1.18 per adjusted share. This came in ahead of

an LSEG SmartEstimate of $1.13 per share.

Fee-related earnings rose 17% to $887 million, spurred by

growth in management fees and its capital markets business.

Market volatility was high in the quarter, stemming from

U.S. President Donald Trump's pledges to impose tariffs on

trading partners around the world. Fee-related income, however,

can provide money managers with stable earnings when markets are

turbulent. Large firms like KKR also benefit from having

diversified portfolios.

KKR's assets under management now total $686 billion, a 14%

annual increase. It raised $28 billion in new capital in the

quarter.

Recent announcements from KKR include the acquisition of

HealthCare Royalty Partners, which buys rights to the royalties

flowing from pharmaceutical companies' drug sales.

KKR also teamed up with Capital Group to seek SEC approval

for a fund that blends public and private equity, looking to

capitalize on rising demand from wealthy retail investors.

Separately, KKR said it had raised $6.5 billion to invest in

asset-backed finance. It said this fund will focus on

opportunities to buy debt similar to the deal it and PIMCO

struck with motorcycle maker Harley Davidson ( HOG ).