Why does the butter separate in my finished caramel sauce

Are you heating the cream before adding it? I immerse the bottom of the pot in ice water as soon as I remove it from the heat to stop the caramel from cooking. I stir in the soft butter immediately after, then begin adding hot cream that I've brought to a scald in about 4 additions. If the cream is cool or cold, its fat will separate because the caramel cools too rapidly.

The butter is probably too soft. I generally whisk cool butter into a caramel sauce that I've allowed to cool for 5 minutes or so.