When it comes to cyber risk, most organisations underestimate the true cost of inaction. For private equity firms managing multiple portfolio companies, the stakes are even higher. A single breach can cascade across the portfolio, eroding enterprise value, slowing down exit plans, and damaging investor confidence. That’s why Continuous Controls Monitoring (CCM) has become a critical tool for risk reduction and value protection.
But here’s the question every board and investor asks: Is it worth the spend?
The Risk Landscape
Cyber incidents are no longer rare. According to Sophos’ State of Ransomware 2024 report, 59% of organisations experienced a ransomware attack in the past year, a slight decline from around 66% in 2021–22. For mid-sized companies, the average cost of such an event—including ransom payments, downtime, data recovery, legal exposure, and reputational damage—is estimated at $4M per incident.
Now, consider a private equity firm with 15 portfolio companies, each carrying an Annual Loss Expectancy (ALE) of $4M. That adds up to a total portfolio risk exposure of $60M per year—before any mitigation is applied.
What Continuous Controls Monitoring Delivers
Continuous Controls Monitoring addresses this challenge head-on by:
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Connecting to any data source across IT, cloud, IoT, and security tools
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Monitoring any control in real time rather than relying on periodic audits
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Providing continuous assurance that controls remain effective
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Giving CISOs and boards live visibility into vulnerabilities, misconfigurations, and compliance gaps
On average, CCM platforms reduce cyber risk by around 60%. Applying that to the $60M ALE gives a risk avoidance of $36M per year.
The Investment
Deploying CCM across these 15 portfolio companies costs roughly $100k per company, or $1.5M total.
So the calculation looks like this:
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Total risk avoided: $36M
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Total cost of CCM: $1.5M
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Net benefit: $34.5M
The ROI Case
ROI is calculated as:
ROI= Benefit – Cost/Cost
(\frac{36M – 1.5M}{1.5M} = 23 \text{ (or 2300%)})
This means:
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For every £1 spent, there is a net saving of £23
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Or, looking at gross terms, £1 spent avoids £24 of risk
That’s an extraordinary return. CCM doesn’t just pay for itself—it multiplies the value of every pound invested more than twentyfold.
Beyond the Numbers
While the math is compelling, the strategic benefits are equally important:
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Faster exits: Demonstrating continuous cyber resilience makes portfolio companies more attractive acquisition targets. Buyers are increasingly factoring cyber maturity into valuations.
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Board assurance: Continuous dashboards and reporting provide instant visibility, replacing guesswork with hard data. This strengthens confidence in conversations with LPs and regulators.
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Operational efficiency: Compliance teams no longer scramble for audit evidence; CCM automates monitoring and reporting, freeing staff for higher-value work.
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Risk appetite alignment: Investors can quantify cyber risk reduction in real financial terms, aligning security investment directly with portfolio protection.
Why It Matters for Private Equity
Value creation in private equity isn’t just about revenue growth or operational improvements—it’s also about protecting what you already own. Cybersecurity failures don’t just result in one-off costs—they can derail an entire investment thesis.
A breach can lead to:
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Loss of customer trust and churn
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Regulatory fines and legal actions
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Extended downtime impacting EBITDA
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Reputational damage across the portfolio
CCM acts like an insurance policy with measurable ROI. Instead of hoping portfolio companies are secure, investors get proof—live evidence that controls are working and risks are being reduced every day.
The Bottom Line
In a world of escalating cyber threats, the economics of CCM are hard to ignore. Across a 15-company portfolio, an investment of $1.5M doesn’t just avoid potential losses—it delivers a net risk reduction benefit of $34.5M, translating to a 2300% ROI.
Put simply:
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£1 in = £24 out in avoided risk
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£23 net gain per £1 spent
For private equity firms, that’s not just a good return—it’s a competitive advantage. Investors scrutinise resilience as closely as growth, and CCM provides the assurance that portfolio value is protected, exits are de-risked, and every pound spent delivers outsized impact.
Final thought: Continuous Controls Monitoring isn’t just about compliance or security—it’s about value preservation and creation. The ROI math is clear: doing nothing is the most expensive option of all.
➡️ To explore our full ROI models for private equity firms, download the ROI of CCM ebook at the top of the blog. Explore our ROI series for other industries here.
Take a look at our CCM platform here.