Private equity firms step up risk management; Firms are increasingly bringing in outside help with portfolio company troubleshooting
By Ayesha Javed
Private equity firms are increasingly bringing in the help of business intelligence and risk management specialists to discreetly assess potential investments and address issues such as fraud and corruption at portfolio companies as they seek to resolve problems internally.
Kenneth Springer, president of business intelligence firm Corporate Resolutions and a former special agent of the Federal Bureau of Investigation, said that portfolio company investigations carried out by his firm had increased by 20% between 2013 and 2014, which he said could be “representative of the increased awareness of [private equity] firms who are now more inclined than before to address allegations rather than turn a blind eye.”
He added: “Every [company] has issues. Most get resolved quickly and quietly.”
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