Debevoise & Plimpton on Cybersecurity: Reducing Threats to Private Equity Firms and Their Portfolio Companies
ByLike other businesses today, private equity firms and their portfolio companies increasingly face serious data security threats – for example, from individual hackers, from organized criminal enterprises and even from their own employees or vendors. We all know from recent press reports that a data security breach can seriously harm the reputation and reduce the value of the affected business. Unremitting efforts by senior management and boards to combat these threats should be seen in 2015 not only as good business but also – with regulators, courts and the plaintiffs’ bar increasingly bearing down on perceived lapses in data protection – as a legal necessity.
In this article we outline some of the steps that private equity firms can take to combat cyber threats. One size does not fit all, of course. Cybersecurity protections must be tailored to the size of a private equity firm (including the funds it manages); the nature of its portfolio companies’ businesses; and the types and volume of data it and they maintain. Still, private equity firms of all types and sizes can look to a common set of basic measures to manage their cyber risks, both business and legal…
