Private equity has always been about finding the hidden gems, cutting through inefficiencies, and transforming companies into lean, mean, value-generating machines. But in today’s world, where a single cyber incident can tank valuations and drag reputations through the mud, Governance, Risk, and Compliance (GRC) is stepping into the spotlight.
For portfolio companies (portcos), cybersecurity is no longer just an IT problem—it’s a business resilience problem. PE firms need to realize that a strong GRC strategy is not just about ticking regulatory boxes but about giving portcos the tools to stay resilient, compliant, and ready to roll with the punches. And here’s the kicker: every portco is different. They think differently, operate differently, and handle risk differently.
So how does a PE firm wrangle this wild mix of maturity levels into a cohesive, resilient portfolio? Let’s dive into it.
The GRC Landscape: Herding Cats with Wi-Fi
Every portco brings its own flavor of risk to the table. Some are forward-thinking tech disruptors with a grasp of cybersecurity basics but no budget to execute. Others are decades-old manufacturers clinging to legacy systems like it’s still 1999. Then you’ve got companies that are hyper-focused on growth and view compliance as an afterthought—until an audit notice arrives in their inbox.
Here’s what that looks like from a GRC perspective:
- Governance? “We’re too busy scaling to worry about policies.”
- Risk Management? “We ran a vulnerability scan once last year. Does that count?”
- Compliance? “We’ll deal with that when the auditors show up.”
The truth is, many portcos operate with a “reactive mindset” when it comes to GRC. They’re focused on delivering value to their customers and investors—not on the policies and frameworks that keep the wheels from falling off. And you know what? That’s understandable. But for PE firms, this chaos is a risk multiplier that can’t be ignored.
Step One: Risk Management – The Good, the Bad, and the Blind Spots
GRC starts with risk management, but this isn’t just about running reports and slapping on red/yellow/green labels. It’s about understanding what keeps each portco up at night—and what they don’t know should be keeping them up.
What does risk actually mean to a portco? For some, it’s intellectual property getting stolen. For others, it’s downtime during a peak sales period or fines from regulators. Every portco’s risk profile is different, so PE firms need a tailored approach.
Here’s how you tackle it:
- Speak Their Language: Don’t hit them with “critical CVEs” and “threat vectors.” Frame risks in business terms: How much revenue is at stake? What’s the brand impact?
- Build a Portfolio-Wide Risk Map: Centralize the way you assess, quantify, and prioritize risks across all portcos. Bonus points if you can visualize the collective risk landscape in one dashboard.
- Make Risk Management Collaborative: Risk isn’t just an IT problem. Engage finance, operations, and HR in the conversation. Cybersecurity is a team sport.
Step Two: Compliance – More Than Just Avoiding Fines
Compliance is often treated like flossing—everyone knows it’s important, but most companies do it only when they’re forced to. For PE firms, this attitude can be a ticking time bomb, especially for portcos in regulated industries like healthcare, finance, or even retail.
From a GRC lens, compliance isn’t just about checking boxes—it’s about creating sustainable processes that make audits, certifications, and even exits smoother.
What’s the compliance maturity gap?
- The scrappy SaaS startup? They might not even realize GDPR applies to them because they have one customer in the EU.
- The old-school manufacturing company? They’ve probably got compliance policies buried in a dusty binder from 2007.
- The portfolio darling? They may already have some compliance muscle but are overwhelmed by the workload of managing SOC 2, PCI, HIPAA, and more.
Here’s how you help:
- Automate Compliance Where You Can: Use tools that streamline audit prep, track regulatory changes, and provide a single source of truth for compliance documentation.
- Create a Compliance Roadmap: Rank compliance efforts based on business impact, starting with the basics (data protection) before tackling niche standards.
- Standardize Across the Portfolio: Provide templates, frameworks, and playbooks to eliminate redundant efforts across similar companies.
Step Three: Third-Party Management – The Risk You Don’t See
Every portco depends on third parties—cloud providers, payroll systems, manufacturing vendors, you name it. But third-party risk is like the hidden iceberg that can sink the ship. When you’re dealing with multiple companies, each with its own supply chain, third-party management becomes a GRC nightmare.
Common mistakes?
- Not vetting vendors thoroughly.
- Failing to negotiate cybersecurity responsibilities into contracts.
- Relying on vendor-supplied security questionnaires without verifying the answers.
PE firms can create massive value by stepping in here.
How to tame third-party chaos:
- Portfolio-Wide Vendor Management Programs: Provide portcos with a centralized process for onboarding, assessing, and monitoring vendors.
- Standardized Contracts: Mandate cybersecurity clauses in every vendor agreement.
- Incident Response Integration: Ensure vendors are part of portcos’ incident response plans—no one wants to figure out roles in the middle of a breach.
Step Four: Vulnerability Management – Don’t Just Find Problems, Fix Them
Let’s be real: most portcos struggle with vulnerability management because it feels like an endless game of whack-a-mole. New vulnerabilities pop up faster than they can be patched, and resource-constrained IT teams are forced to make hard choices about what to fix and when.
From a GRC perspective, this is where risk prioritization meets operational execution.
Here’s how you level up:
- Focus on the High-Risk Assets: Not every vulnerability is created equal. Teach portcos to prioritize fixes based on business impact.
- Enable Patch Management at Scale: Provide tools or guidance to streamline patching processes across diverse systems.
- Make Vulnerability Metrics Actionable: Create reporting that’s not just numbers but insights—e.g., “Your time-to-patch critical vulnerabilities has decreased by 20%.”
Why Multi-Tenant GRC is a Game-Changer for PE Firms
Here’s the bottom line: Multi-tenant GRC platforms are how you transform cybersecurity chaos into measurable business value across your portfolio.
Think about the typical private equity challenge: you’ve got 10, 20, or even 50 portcos, all at different stages of maturity. Some barely have an IT team, while others are large enterprises drowning in complexity. A one-size-fits-all solution doesn’t cut it, and managing risk, compliance, and governance for such a diverse portfolio can feel like juggling flaming swords.
This is where multi-tenant GRC shines. It allows PE firms to centralize governance while giving each portco the flexibility to operate at its own pace.
Scalability:
A multi-tenant GRC platform scales seamlessly as your portfolio grows. Whether you’re onboarding a five-person startup or a multinational enterprise, the platform lets you expand coverage without needing to reinvent the wheel. You can set up standardized frameworks, automate repetitive processes, and monitor risk across all portcos in one unified dashboard.
Cost Efficiency:
Let’s be real—cybersecurity tools can get expensive fast, especially when you’re trying to implement them across dozens of companies. Multi-tenant GRC platforms eliminate redundancies by allowing PE firms to share resources across portcos. Instead of each company buying and maintaining its own set of tools, you can leverage economies of scale to drive down costs while still providing top-tier capabilities.
Consistency Without Overhead:
A multi-tenant approach ensures consistency across the portfolio—whether it’s tracking regulatory compliance, managing third-party risks, or addressing vulnerabilities. But here’s the kicker: it doesn’t create extra work for your portcos. Each company gets its own view and controls, tailored to their specific needs, while the PE firm maintains oversight at the portfolio level.
Faster Time to Value:
Exit strategies are where PE firms make their money, and multi-tenant GRC helps accelerate this process. By standardizing and streamlining GRC practices, portcos can quickly reach compliance milestones, reduce their risk footprint, and boost valuations—making them more attractive to buyers.
The Competitive Edge:
In today’s market, operational resilience is a differentiator. Buyers aren’t just looking at EBITDA; they’re scrutinizing how companies manage risk, compliance, and governance. A multi-tenant GRC strategy enables PE firms to position their portfolios as safer, smarter, and more resilient investments.
For PE firms, multi-tenant GRC isn’t just a nice-to-have—it’s a critical tool for scaling, saving costs, and unlocking value across a diverse portfolio.
The tool is very powerful and by using the various modules, we can centralize a lot of oversight and governance of our issues, vulnerabilities, risks, vendors, control framework, compliance and risk assessments. Given the flexibility of the tool, we can tailor it to meet our specific needs. I would say the biggest advantage and differentiator with TruOps is the support and expertise you get along with the tool. The support staff is extremely responsive, helpful and very knowledgeable in risk management. Not only do you get support resources that are always willing and ready to help, but you get high quality risk advice and guidance.
All it takes is 30 minutes to see how TruOps will get you to assessments and beyond.
