Private equity firms use insurance floats for investment, Adam Butler notes

Private equity firms use insurance floats for investment, Adam Butler notes
Private equity approach to insurance floats

Adam Butler challenges comparisons between current private equity strategies and those used by Warren Buffett. He explains that while Buffett effectively used insurance portfolio floats as a smart approach, current private equity firms are purchasing insurance vehicles specifically to fill their floats with investments that are technically compliant rather than following Buffett’s broader strategy.

Butler has recently analyzed how looser securities regulations may signal fundraising challenges for issuers. In a separate note, he explained that Modern Monetary Theory uses taxes and investment to address inflation. These comments provide context for his views on current private equity and insurance investment approaches.

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