KKR & Co. passed $500 billion in assets under management during the fourth quarter even as earnings fell 41 percent on sluggish asset sales.

The New York-based firm raised $16 billion of new capital in the quarter to reach $504 billion in AUM, it said in a statement. Distributable earnings fell to $822 million, or 92 cents a share, from $1.4 billion, or $1.59, a year earlier. That beat the 85-cent average estimate of 14 analysts surveyed by Bloomberg.

“On the back of strong investment performance, we had our second-best fundraising year ever, helping double our AUM over the last two years to $500 billion,” Co-chief executive officers Joe Bae and Scott Nuttall said in the statement. “We feel incredibly well-positioned for this environment with over $100 billion of dry powder ready to deploy.”

Private equity grew rapidly during an era of low-interest rates, driven by pensions and endowments looking for higher returns. But institutional investors are limited in their ability to invest more into the asset class and high-interest rates have crimped the borrowing that greases deals. Blackstone Inc. reported a 41 percent decline in distributable earnings in the fourth quarter, and missed its target of amassing $1 trillion in assets by the end of 2022.

The firm has a broad window into the state of the economy, with investments that include insurance brokerage USI, veterinary hospital network PetVet Care Centers and Heartland Dental.

KKR’s private equity portfolio was flat during the quarter, but declined 14 percent last year as the firm marked down the value of investments. Real estate assets fell 8 percent during the quarter while rising 3 percent for the year. KKR capped withdrawals on its real estate investment trust after redemptions exceeded the limit during the first quarter.

Distributable earnings were $3.5 billion for the year, a 12 percent decline. Fee-related earnings fell 8 percent during the quarter to $559 million, but increased 10 percent in 2022.

The firm’s uncalled commitments — money pledged by investors — declined 4 percent year-over-year to $108 billion. It invested $16 billion during the quarter ending Dec. 31, driven by $6 billion deployed in infrastructure and real estate.