When it comes to cybersecurity, the biggest threat isn’t what you see, it’s what slips past unnoticed.
Protecting a single portfolio company from a cyber incident is challenging enough. Protecting every company in a fast-moving, high-growth portfolio? That’s a different level of complexity. The threat landscape shifts daily as M&A deals introduce new exposures overnight and smaller operating companies often lack in-house expertise to identify advanced threats before it’s too late.
But here’s the opportunity: when one breach is caught early and analyzed in depth, the lessons learned can harden defenses across an entire portfolio. As long as the right processes and partnerships are already in place.
The Hidden Complexity of Portfolio Cybersecurity
Unlike a single corporation with centralized oversight, PE portfolios bring together a mosaic of industries, operating models, and technology environments. That diversity fuels growth. It also creates security blind spots.
Decentralized IT governance leaves gaps. Newly acquired companies often arrive with unvetted infrastructure that attackers can exploit. As we explored in Technology as a Value Creator for Private Equity Portfolio Companies, technology can accelerate growth, but only if it’s secure from day one.
Without a portfolio-wide approach, even the strongest company in your portfolio can be exposed through a weaker one.
Why “Shock Events” Matter More Than Known Risks
Our recent Operating Partners Survey revealed a telling statistic:
65% of PE firms invest in cybersecurity, but only 31% are building real crisis management plans.
Most are prepared for the threats they expect, like phishing or ransomware, but not for the “shock events” that can derail value.
That’s a dangerous gap in an era where geopolitical tensions, supply chain disruptions, and targeted mid-market attacks are on the rise. True resilience means more than meeting compliance standards. It’s about anticipating the breach you don’t see coming and having a plan to contain it before it spreads.
Turning a Breach into a Portfolio-Wide Defense
In our work with portfolio companies, we’ve seen how Managed Detection and Response (MDR) turns a single incident into a strategic advantage:
- Proactive Hunting: A seasoned SOC analyst spots something off—not a confirmed breach, just a hunch worth chasing.
- Incident Containment: The anomaly is investigated, confirmed, and neutralized before it causes damage.
- Pattern Recognition: Analysts uncover tactics, techniques, and indicators of compromise that might exist elsewhere in the portfolio.
- Portfolio Rollout: Those findings inform new detection strategies, deployed across every company to close gaps before attackers find them.
It’s the same principle we highlighted in Tech Diligence for Tomorrow: M&A Strategy in the Age of AI: using data, insight, and technical expertise to protect value across the entire investment lifecycle.
Cybersecurity as a Value Lever
E78 views cybersecurity through the same lens as finance and technology infrastructure—an essential driver of portfolio value.
A single cyber incident can erode margins, slow integration, and weaken the story you tell at exit. The real advantage comes when security becomes a shared asset across the portfolio:
- Safeguard portfolio economics by protecting EBITDA and operational continuity.
- Accelerate post-close integration with a clear, tech-enabled security playbook.
- Strengthen exit positioning by demonstrating operational resilience to buyers.
When protection is built to scale, defending one company means defending them all. That’s not just risk management—that’s value creation.
Don’t wait for the next breach to reveal your blind spots. Learn how to find them, and fix them, before they cost you value.
