Although hedge funds, family offices, and other asset managers must also prioritize cybersecurity, private equity firms face a particularly complex challenge. Due to the vast amount of personal and financial data they handle, these firms are a prime target for bad actors. That’s why private equity firms must improve their cybersecurity practices and foster a strong culture of security within their organization.

Businesses that take cybersecurity risks seriously will have the most to gain as threats continue to rise. With proper cybersecurity for private equity firms, you can withstand increasing attacks.

Common cybersecurity threats for private equity firms

Some typical attacks that bad actors use to target private equity firms include:

  • Ransomware: Hackers will steal a firm’s sensitive information and ask for a ransom, usually payable in cryptocurrency.
  • Phishing: Bad actors target private equity firms by sending fraudulent emails disguised as legitimate requests for sensitive data, such as financial data and personally identifiable information.

Strategies for private equity cybersecurity

Private equity firms can adopt a dual strategy approach toward cybersecurity measures. They can:

  • Protect their firm and investors’ assets.
  • Safeguard their portfolio company targets.

Preserve your firm and investors’ assets

Some basic actions you can take to safeguard your company and investors against private equity cyber risks include:

  • Develop a framework to assess the primary risks your company might face based on industry best practices.
  • Identify your cyber vulnerabilities.
  • Educate employees about cyberthreats and how to safeguard the company and its stakeholders.
  • Enforce a social media policy that governs what information employees can share to minimize phishing.
  • Conduct ongoing evaluations of your cybersecurity policies and test the effectiveness of policies with tabletop exercises for employees.

Protect your portfolio company targets

You can also take action to minimize risks when assessing portfolio company targets, such as:

  • Integrate a strong layer of cybersecurity into your merger and acquisition due diligence procedure to identify any potential problems before finalizing deals.
  • Conduct a comprehensive assessment of the cyber risks associated with potential investments, much like you would evaluate the sales, management, purchasing, and other significant aspects of a targeted portfolio company.
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Safeguard your private equity firm

You can ward off potentially harmful events by employing cyber protection for your private equity firm. Agio offers comprehensive cybersecurity solutions that follow the NIST framework and incorporate dynamic machine learning to keep your firm safe. Find out more about our cybersecurity solutions or contact us online to discuss your firm’s needs.