PE firms are exposed as cybersecurity has evolved into a material transaction risk. Cyber risk is no longer merely an operational concern; it has also become a direct threat to deal flow and valuation.
Kroll surveyed more than 300 global PE executives to understand cybersecurity risk and fund-level management practices. It found that incidents are becoming more frequent and there is an average financial impact of $2.1 million (mn), often scaling up to $10 mn. Larger firms tend to have stronger defenses, governing through strict mandates and centralized platforms, causing smaller firms to suffer disproportionately more from costly remediation and disrupted deals.
PE firms should take measures to govern cyber risk more effectively and encourage the adoption of enterprise-grade security protections across their portfolio to avoid disruption, limit financial losses, and protect exit value.
