The Wall Street Journal article, “Private-Equity Firms Tighten Focus on Cyber Defences at Portfolio Companies” discusses the growing concern among private equity firms regarding cyber-security at the companies they invest in. This is driven by the increasing frequency and severity of cyber-attacks and increasing regulatory requirements for data protection.
The article states that private equity firms are beginning to consider mandating a variety of measures to improve cyber defences at portfolio companies, including conducting regular assessments, implementing security protocols and providing training for employees. The focus on cyber security is also extending to due diligence, with firms now conducting cyber-security assessments before making any investments. Some private equity firms are also providing cybersecurity services to portfolio companies, such as incident response and penetration testing, to help protect against cyber threats.
The COVID-19 pandemic has accelerated the trend, with more employees working remotely, which has increased the risk of cyber-attacks.
While private equity firms have traditionally focused on financial and operational performance, they are now recognising the importance of cybersecurity in protecting the long-term value of their investments.
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