Mastering how to buy and manage a private equity firm is important for its success — but what about an exit strategy? Once you enter the private equity lifecycle, attention shifts to successful management and exit strategies so you can relinquish ownership for a profit.

Exiting private equity firms isn’t always a straight path due to the challenges these firms grapple with — including cybersecurity. A helpful starting place is understanding exit strategy tips for private equity firms in relation to data management and cybersecurity.

Cybersecurity exit strategy tips for private equity

Streamlining cybersecurity in private equity firms comes with many challenges, from the ever-evolving nature of cyberthreats to the limited visibility that portfolio companies (PortCos) have over their cybersecurity infrastructures. For these reasons, many owners find it difficult to execute successful exits.

Here are a few cybersecurity tips to help you with the private equity exit process.

Streamline your data management policies

Whether employee, customer, or financial data, effective data and system management starts with streamlining the data management policies of your PortCos.

All companies under your private equity portfolio must subscribe to the same data management policies. Streamlined data management systems make it easier to track progress and keep crucial information safe across the board. As a result, you can easily relinquish ownership and pass down safe, reliable, and useful data to the next management protocol.

Invest in PortCo risk management

Each PortCo under your private equity fund faces diverse risks that could harm your exit strategy. Investing in a managed service provider (MSP) can help address infrastructure management and cybersecurity governance challenges.

For instance, Agio has experience helping PortCos manage their infrastructure to help mitigate the inherent risk in private equity firms. Our security-by-design approach puts guardrails around target PortCos, streamlining acquisition lifecycles via thorough assessments, due diligence, and post-purchase integrations.

Whenever you acquire a new PortCo, your MSP should ensure your new entrant is fully protected by identifying risks and presenting solutions for standardized governance.

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Sell to yourself

Investing in robust cybersecurity infrastructure costs money, and it may not be profitable to sell your company before it attains its optimal value. When a private equity fund approaches the end of its life, whether after 5 years or 10 years, the fund manager must exit the investment. In such instances, it’s best to sell the PortCo to yourself as a strategy to continue managing the investments until they reach the most optimal ROI.

Let Agio assist with a cybersecurity-focused exit strategy

As your private equity firm expands, cybersecurity challenges diversify and could grow beyond your internal IT team’s capabilities. With our robust MSP solutions, you can trust that when your firm grows, we’ll scale up to keep your growing portfolio safe. Contact us today to get started on a successful firm management and cybersecurity-focused exit strategy.