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Risk in Context Podcast: Creating value in private equity investments through robust cyber strategies

For private equity funds investing in organisations of all sizes and across all industries, understanding and quantifying cyber risk is critical in order to better determine the viability of a target company.

In today’s rapidly evolving business landscape, organisations are embracing new technologies to enhance operational efficiencies and deliver improved experiences to their customers. But their implementation at a time of expanding cyber threats is increasing the spotlight on cyber risk management.

For private equity funds investing in organisations of all sizes and across all industries, understanding and quantifying cyber risk is critical in order to better determine the viability of a target company. Further, the majority of private equity funds view any improvements in a portfolio company’s cybersecurity as an integral part of their value creation and exit strategies.

In this episode of Risk in Context, Paul Knowles, Global Head of Marsh Specialty’s Private Equity and M&A Practice, talks to David Hau, Cyber Private Equity and M&A Leader for the US and Canada, Jeff Bird, Senior Vice President for Cyber Marketplace Services, and Allison (Allie) Pan, Senior Vice President within Marsh’s Emerging Risks Practice. They discuss the cyber-related challenges that private equity funds may come across, including difficulties linking a target’s cybersecurity posture to financial decision-making, and the importance of collaboration to improve an organisation’s cyber hygiene as a value-creation strategy.

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Key takeaways

Cyber risk management among focus areas for PE firms

Concerns about potential cyber threats together with the opportunities of increasing the value of portfolio companies by improving their cyber posture is putting cyber risk management at the forefront for private equity firms.

Due diligence should include cyber risk quantification

Aside from assessing the maturity of target companies’ cybersecurity programmes, a thorough due diligence process can provide the financial analysis that can drive better decisions both pre- and post-acquisition.

A successful cybersecurity strategy requires a team effort

Successful businesses are building a trusted ecosystem of cross-organisation collaboration that allows them to prioritise their cybersecurity investments and implement robust strategies to help them reduce risk and create value.

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Paul Knowles

Global Head, Private Equity and M&A Practice

  • United States

Paul Knowles is the Global Head of Marsh Specialty’s PEMA Practice and a member of the Global Specialty Executive Committee; he is also a member of the Marsh McLennan Private Equity and M&A leadership team. Throughout his 33-year insurance broking career, he has helped structure and manage risk and insurance programmes for global clients, as well as manage major infrastructure projects around the world in the power and energy as well as civil engineering sectors. 

Jeffrey Bird

Jeffrey Bird

Senior Vice President for Cyber Marketplace Services

  • United States

Jeff Bird co-leads the cybersecurity marketplace services programme for Marsh where he advises clients on prioritising and selecting cybersecurity solutions, tools, and services that align to their unique needs and requirements. He has close to 20 years of experience leading large programmes in technology and business, including cyber risk, information security and privacy, operational resilience and continuity, technology risk management, technology compliance, and internal audit.

Allison Pan

Allison (Allie) Pan

Senior Vice President, Emerging Risks, Marsh

  • United States

As a senior vice president in Marsh’s Emerging Risks Practice, Allie Pan is responsible for helping clients understand their strategic risks, especially in nascent and complex peril classes such as cyber, climate, violent threats, and supply and value chains.

David Hau

David Hau

Cyber Private Equity and M&A Leader, US and Canada

  • United States

David Hau is the Cyber Private Equity and M&A Leader for the US and Canada. He is responsible for leading the cyber strategy for Marsh’s PEMA business by delivering tailored solutions that help assess and minimise clients’ cyber and technology risks across their enterprise and portfolios.

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