Cyber attacks on businesses have grown exponentially in scale and complexity over a relatively short span of time. When it comes to preventing cyber threats, private equity firms are well behind other companies. Though cyber breaches have direct cost on business, many PE firms are not proactive about cybersecurity, viewing it mainly as an afterthought.
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Cyber risk is proportional to the value of data, and PE firms possess critical deal and investor information that makes them especially attractive to hackers. Breaches at the fund level can shake investor confidence and impact the firm’s ability to raise funds. PE investment firms often invest in companies in industries with high potential for cyber breaches like retail, healthcare and financial services. For starters, private equity firms should make cybersecurity an ongoing process that becomes part of the company’s strategies and risk appetite, weave it into the diligence process and develop a comprehensive breach response plan. In this video, Jim Ambrosini, Managing Director, Cybersecurity at CohnReznick Advisory, addresses the major cyber risks facing PE firms and what they can do to protect their firm and portfolio companies.