![]() Here are just a few of the relevant data points showing the increased threat: The evolving tactics of cybercrime groups have made the cybersecurity issue a particularly prominent one for private equity. The current private equity cybersecurity threat landscape Finally, we address how a mature, fund-led cyber program can not only reduce risk but increase a fund’s competitiveness and ability to innovate. There are lessons from several funds that have confronted cyber threats and can explain how they play a more active role in addressing them. Funds can play a major role in reducing risk across their portfolio without substantially increasing their own risk and without becoming mired in day-to-day operations or technical minutia.ĮY-Parthenon interviewed numerous clients to lay out the current private equity cyber threat risk and legal landscape and the role funds can play to push back against criminal disruption of their business model. Fortunately, many funds have already recognized that they need to be consistently engaged with their portfolio companies on cybersecurity and that incremental measures may not be sufficient. PE fund-level technology leaders can turn the tide, however, if they build a more comprehensive cybersecurity strategy throughout the portfolio company ownership lifecycle, from due diligence and acquisition through exit. The FBI, private equity leaders and EY-Parthenon teams steeped in cybersecurity consulting are seeing a measured increase in cyber activity targeting PE transactions and portfolio companies, where victims are perceived to be easier targets with deep pockets to pay extortionate ransomware demands. Media outlets also are taking note after the recent, unprecedented wave of buying by private equity, which created more targets than ever for malicious actors to pursue. ![]() Portfolio companies are typically midsize, resource constrained and too often unable to adequately defend themselves against sophisticated threat actors who are increasingly focused on them. That is why many PE investors need to refocus on cybersecurity risks now. From the vantage point of cyber threat actors, private equity (PE) is an increasingly inviting target, and private equity cybersecurity is fast becoming a leading challenge for funds across the world.
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