Key Takeaways
- • Average financial impact of $2.1 million per cybersecurity incident across private equity firms, with 53% probability of losses exceeding $500,000 and 13% probability exceeding $5 million per incident, according to Kroll's survey of 300+ global PE executives.
- • 94% of surveyed PE firms reported some financial impact from cybersecurity risk, including reduced valuations, diminished exit prices, or increased compliance and training costs, demonstrating pervasive portfolio value destruction.
- • 80% of PE firms experienced cyberattack-related disruption during the survey period, with 27% suffering outright business downtime, establishing cyber incidents as an operational and strategic deal risk across the sector.
- • Significant due diligence gap between large and small PE firms: 81% of firms managing >$25 billion AUM integrate cybersecurity into transaction diligence, versus only 29% of smaller firms (<$25 billion AUM), creating uneven risk exposure and compliance standards.
- • 96% of surveyed PE firms expect portfolio cybersecurity importance to increase over the next 12 months, with 53% anticipating rising financial impact from cyberattacks, signaling structural market recognition of cyber risk as a material transaction and hold-period concern.
Summary
Cybersecurity has emerged as a significant value-destruction driver across the private equity lifecycle, according to new research from Kroll released in March 2026. The firm's global survey of more than 300 private equity executives reveals that cyberattacks impose substantial financial and operational costs that extend beyond traditional IT security concerns into deal structuring and portfolio valuation metrics.
Financial impact data underscores the severity of cyber incidents for PE investors. Kroll's research found that private equity firms face an average financial impact of $2.1 million per cybersecurity incident. The distribution of potential losses is particularly concerning for deal economics: a 53% probability exists that a single incident will result in losses exceeding $500,000, while 13% of incidents carry financial impact above $5 million. More broadly, 94% of surveyed firms reported some form of financial impact tied to cybersecurity risk, whether through reduced valuations, diminished exit prices, or elevated compliance and training expenditures.
Operational disruption from cyberattacks is widespread. The research indicates that 80% of private equity firms experienced some form of disruption due to cyberattacks during the survey period, with nearly a third (27%) suffering material business downtime. This frequency of incidents—affecting the vast majority of firms at least once—establishes cyber risk as a systematic portfolio management challenge rather than an isolated concern.
A notable divide exists between larger and smaller PE firms in cybersecurity due diligence practices. Kroll identified that 81% of larger firms managing over $25 billion in assets of under management (AUM) have integrated cybersecurity due diligence into standard transaction procedures, compared to only 29% of smaller firms managing less than $25 billion AUM. This gap suggests inconsistent risk assessment practices across the market and potential blind spots for smaller fund managers in evaluating target companies' cyber preparedness.
Forward-looking sentiment among PE executives indicates accelerating concern about cyber risk. Ninety-six percent of surveyed firms expect cybersecurity's importance to grow over the next 12 months, while over half (53%) anticipate that financial impact from cyberattacks will increase in the coming year. This consensus reflects both rising attack frequency and the strategic recognition that cyber risk now qualifies as a material transaction and hold-period concern requiring portfolio-level governance and due diligence integration.
Financial impact data underscores the severity of cyber incidents for PE investors. Kroll's research found that private equity firms face an average financial impact of $2.1 million per cybersecurity incident. The distribution of potential losses is particularly concerning for deal economics: a 53% probability exists that a single incident will result in losses exceeding $500,000, while 13% of incidents carry financial impact above $5 million. More broadly, 94% of surveyed firms reported some form of financial impact tied to cybersecurity risk, whether through reduced valuations, diminished exit prices, or elevated compliance and training expenditures.
Operational disruption from cyberattacks is widespread. The research indicates that 80% of private equity firms experienced some form of disruption due to cyberattacks during the survey period, with nearly a third (27%) suffering material business downtime. This frequency of incidents—affecting the vast majority of firms at least once—establishes cyber risk as a systematic portfolio management challenge rather than an isolated concern.
A notable divide exists between larger and smaller PE firms in cybersecurity due diligence practices. Kroll identified that 81% of larger firms managing over $25 billion in assets of under management (AUM) have integrated cybersecurity due diligence into standard transaction procedures, compared to only 29% of smaller firms managing less than $25 billion AUM. This gap suggests inconsistent risk assessment practices across the market and potential blind spots for smaller fund managers in evaluating target companies' cyber preparedness.
Forward-looking sentiment among PE executives indicates accelerating concern about cyber risk. Ninety-six percent of surveyed firms expect cybersecurity's importance to grow over the next 12 months, while over half (53%) anticipate that financial impact from cyberattacks will increase in the coming year. This consensus reflects both rising attack frequency and the strategic recognition that cyber risk now qualifies as a material transaction and hold-period concern requiring portfolio-level governance and due diligence integration.
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