Cybersecurity Threats Erode Private Equity Deal Values by $2.1M on Average, Kroll Report Finds
Event summary
- Kroll's survey of 325 PE executives reveals 94% suffered financial impact from cyber incidents, averaging $2.1M per event.
- 80% of firms experienced disruption during hold periods, with 27% facing business downtime.
- Larger PE firms (>$25B AUM) are more prepared, with 55% governing cyber risk formally vs. 12% of smaller firms.
- 96% of PE firms expect cybersecurity importance to increase in 2026, with 53% predicting greater financial impact.
The big picture
Cybersecurity has emerged as a material transaction risk in private equity, threatening deal flow and valuation. The divide between larger firms with formal cyber risk governance and smaller firms relying on manual processes highlights a structural vulnerability in the industry. As cyberattacks increase in frequency and financial impact, PE firms face growing pressure to implement disciplined cybersecurity controls to protect portfolio value.
What we're watching
- Governance Gaps
- How smaller PE firms will address their underdeveloped cyber risk governance structures to avoid disproportionate value destruction.
- AI-Driven Threats
- The pace at which generative AI will amplify cyberattack effectiveness and financial impact across PE portfolios.
- Regulatory Scrutiny
- Whether increased cyber incidents will trigger stricter regulatory oversight of PE firms' cybersecurity practices.
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