Identifying Data Privacy Risks in Private Equity
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March 24, 2025
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Privacy is an increasingly important area of non-financial risk that private equity investors must consider. In an era of heightened regulatory scrutiny and growing consumer expectations around data protection, assessing privacy risks has become a critical component of due diligence.
The Impact of Privacy Risks on Acquisitions
Acquisitions often involve highly data-driven companies with significant data assets, that can contain personal information such as customer lists and other sensitive data. These assets are subject to compliance obligations under regulations like Australia’s Privacy Act, and failure to assess privacy risks before acquiring a target could result in significant financial and regulatory consequences, including penalties from the Australian privacy regulator.
Data Privacy Strategies for Private Equity Firms
One of the primary ways FTI Consulting can support private equity clients is by integrating privacy risk assessments into the transaction due diligence process. Our approach includes:
- Conducting in-depth privacy risk assessments of target companies
- Reviewing ongoing regulatory investigations and assessing the potential of an adverse outcome
- Assisting in uplifting privacy and information governance frameworks
- Implementing better controls for managing personal data
- Remediating ongoing data risks, such as over-retained data, to ensure compliance and reduce liability
- Enhancing privacy practices to strengthen the company’s long-term resilience and overall market value.
Safeguarding Your Investments Through Privacy Risk Management
Data privacy risks in private equity require careful assessment and proactive management. By conducting thorough due diligence, ensuring compliance, and implementing strong privacy controls, investors can mitigate risk, protect their investments, and ultimately enhance the value of their portfolio companies.
To learn how we can help you navigate and manage privacy risks in your acquisitions, contact Tim de Sousa.
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Published
March 24, 2025
Key Contacts
Managing Director