M&A Trends PE Firms Are Mandating Portfolio Cyber Measures during Evaluation


The relationship between PE firms and portfolio companies is delicate. General Partners (GPs) often have strong operational experience, something that translates into detailed thought on how to run the businesses they own. But strong managers don’t want to be micro-managed. To attract and retain top talent, funds, therefore, aim to be additive vs directive.

With the frequency and cost of security breaches continuing to rise, we’ve noticed that many private equity firms are taking an increasingly active posture toward security. Twelve months ago, we often heard, “How can we view security risk across our portfolio” and “What’s the best way to talk about cyber risk at a board level?” Today, as PE firms find security vendors they trust, they are beginning to mandate elements of portfolio firms’ cyber programs. The scope of these activities range from cyber-insurance coordinated at a PE fund level (e.g. via McGriff) to mandated penetration tests, security audits and external scans with pre-approved vendors. An article from Crains New York highlights this by saying “For private equity firms, taking a proactive stance on cybersecurity can strengthen investor confidence: It can also help them attract new investors and increase their competitive advantage.”

In the near future, we anticipate higher adoption of passive tools that provide PE firms with cross-portfolio visibility into firms’ real-time security posture. According to the Wall Street Journal, “The fear of cyberattacks, coupled with regulations such as New York state rules requiring financial firms to assess and manage cyber risks, has pushed security to the fore among senior executives and board members in recent years.”

Built by experts from various U.S. National Intelligence communities and designed to mimic the best cyber adversaries, our cybersecurity offerings provide critical insights into your organization’s cyber posture at present, over time, and into the future. Liberty Advisor Group provides top layer cyber defense with the main objective of helping you avoid breaches in the first place.


Liberty Advisor Group is a goal-oriented, client-focused, and results-driven consulting firm. We are a lean, handpicked team of strategists, technologists and entrepreneurs – battle-tested experts with a steadfast, start-up attitude. Our team, with an average of 15+ years of experience, has delivered over $1 billion in operating income improvement and over 300 M&A deals for our clients. We collaborate, integrate and ideate in real-time with our clients to deliver situation-specific solutions that work. Liberty Advisor Group has the experience to realize our clients’ highest ambitions. This year, Liberty has been named to the 2019 Best Places to Work in Chicago and to FORTUNE’s list of Best Workplaces in Consulting and Professional Services.


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