Key Takeaways
- • Limited partners are intensifying cybersecurity scrutiny during PE fund due diligence, with 91% of CFO survey respondents reporting that LPs ask detailed or somewhat detailed questions about cybersecurity protocols, and 67% (2 out of 3) asking specifically about cyberattack readiness policies.
- • PE fund CFOs are increasing investment in cybersecurity resources in direct response to LP pressure: 55% of surveyed finance leaders reported increased cybersecurity spending over the past 12 months, with 61% noting that strong cybersecurity protocols are now viewed by investors as "must-haves" rather than optional enhancements.
- • Cybersecurity has shifted from a peripheral risk consideration to a core value preservation mechanism, with 47% of respondents noting that investor questions about cybersecurity have increased significantly within the past year, signaling a structural change in LP expectations.
- • PE fund management must adopt tailored cybersecurity strategies calibrated to the maturity level of individual portfolio companies, requiring collaboration between fund leadership and operating teams to translate LP expectations into operational improvements.
Summary
Private equity fund management faces mounting pressure from limited partners to establish robust cybersecurity protocols and governance frameworks. According to the Private Funds CFO Insights Survey 2025, commissioned by PEI Group in collaboration with RSM US LLP and based on responses from over 120 finance leaders, institutional investors now view cybersecurity as a fundamental component of risk management and value preservation rather than a discretionary compliance function.
The intensity of LP engagement on cybersecurity has accelerated materially. Nearly half of surveyed CFOs (47%) reported that investor questions about cybersecurity have increased over the past 12 months. More strikingly, 91% of respondents indicated that LPs are posing very detailed or somewhat detailed cybersecurity questions during due diligence processes, while two-thirds (67%) report that LPs are consistently or occasionally asking about cyberattack readiness policies. This level of granular scrutiny reflects institutional investors' heightened awareness of cyber risk as a material threat to portfolio asset values.
In response to these escalating expectations, PE fund CFOs are committing greater resources to cybersecurity infrastructure. Fifty-five percent of surveyed finance leaders reported increased investment in cybersecurity resources—both human and technological—over the past 12 months. Concurrently, 61% of CFOs noted that strong cybersecurity protocols are now considered "must-haves" by investors, signaling a shift from optional enhancements to mandatory operational requirements.
RSM's analysis emphasizes that effective PE cybersecurity programs must be calibrated to the specific maturity level and operational profile of each portfolio company. The firm advocates for proactive strategies encompassing robust risk assessments, business continuity planning, effective governance frameworks, and protections against malware and ransomware threats. This tailored approach requires collaborative effort between fund CFOs, deal teams, and portfolio company management to translate LP expectations into measurable operational improvements and risk mitigation.
The trajectory of these trends underscores that cybersecurity has become a structural feature of PE fund management and a material factor in LP capital allocation decisions. PE firms that fail to establish credible, comprehensive cybersecurity programs face potential disadvantages in fundraising and capital retention.
The intensity of LP engagement on cybersecurity has accelerated materially. Nearly half of surveyed CFOs (47%) reported that investor questions about cybersecurity have increased over the past 12 months. More strikingly, 91% of respondents indicated that LPs are posing very detailed or somewhat detailed cybersecurity questions during due diligence processes, while two-thirds (67%) report that LPs are consistently or occasionally asking about cyberattack readiness policies. This level of granular scrutiny reflects institutional investors' heightened awareness of cyber risk as a material threat to portfolio asset values.
In response to these escalating expectations, PE fund CFOs are committing greater resources to cybersecurity infrastructure. Fifty-five percent of surveyed finance leaders reported increased investment in cybersecurity resources—both human and technological—over the past 12 months. Concurrently, 61% of CFOs noted that strong cybersecurity protocols are now considered "must-haves" by investors, signaling a shift from optional enhancements to mandatory operational requirements.
RSM's analysis emphasizes that effective PE cybersecurity programs must be calibrated to the specific maturity level and operational profile of each portfolio company. The firm advocates for proactive strategies encompassing robust risk assessments, business continuity planning, effective governance frameworks, and protections against malware and ransomware threats. This tailored approach requires collaborative effort between fund CFOs, deal teams, and portfolio company management to translate LP expectations into measurable operational improvements and risk mitigation.
The trajectory of these trends underscores that cybersecurity has become a structural feature of PE fund management and a material factor in LP capital allocation decisions. PE firms that fail to establish credible, comprehensive cybersecurity programs face potential disadvantages in fundraising and capital retention.
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