Over the past 13 years, Protiviti and NC State University’s ERM Initiative have issued annual research reports on the top risks faced by global leaders. The latest report contains insights from these leaders.
Private equity firms and their portfolio companies are shifting their playbooks for the next two to three years. Below are the drivers every PE executive should be watching and how they are reshaping value creation across the portfolio.
Where PE Leaders See the Most Room for Growth
PE firms anticipate strong growth opportunities over the next few years across several areas, driven by both organic and inorganic strategies. Revenue potential ranks highest, underscoring a focus on expanding customer wallet share through improved experiences, differentiated offerings and innovative products. Strategic acquisitions remain central to driving revenue growth and enhancing competitive positioning.
Geographic expansion represents another critical growth lever, often achieved through cross-border M&A to diversify risk and capture emerging market opportunities. For many firms, entering new geographies is directly tied to revenue acceleration and portfolio resilience.
Partnerships and ecosystem development are rising in importance. PE firms are building integrated networks with technology providers and service partners to drive transformation, optimize costs and deliver differentiated customer experiences. These collaborations enable key drivers of enterprise value: scalability and operational efficiency.
What sets PE-owned businesses apart from other global peers in the survey is their execution model. Rather than emphasizing regulatory agility, they prioritize enhancing portfolio performance through technology enablement. AI-driven analytics, pricing optimization and forecasting tools are becoming foundational to value creation strategies for many firms.
AI: The Biggest Accelerator and the Biggest Constraint
PE firms increasingly see AI as a potential game-changer for portfolio performance, but the path to realizing its value is far from straightforward. Two concerns are tied at the top of the list — the inability to deploy AI at a competitive pace and risks related to data and cybersecurity exposure. These issues underscore the urgency of scaling AI solutions quickly while safeguarding sensitive data, intellectual property and deal intelligence, which are some of the most critical assets for PE firms and their portfolio companies.
The competitive pace challenge is about more than speed; it is about deploying AI effectively to deliver a measurable ROI. PE leaders at their portfolio companies recognize that success depends on embedding AI into pricing models, forecasting and operational workflows without disrupting business continuity. However, integration hurdles remain significant. Legacy IT systems and fragmented data environments across portfolio companies continue to slow progress, making technology modernization a prerequisite for AI adoption and scale.
Cybersecurity risk compounds these AI adoption challenges. As firms digitize operations and leverage AI-driven analytics, the attack surface expands. Protecting proprietary algorithms, customer data and deal intelligence is paramount, particularly in an environment where breaches can rapidly erode enterprise value and investor confidence.
What’s Keeping PE Leaders Up at Night
PE leaders are balancing aggressive growth ambitions with persistent operational and technology-related risks. These risk themes reflect not only the operating environment of PE firms themselves but also the conditions shaping performance and value creation across their portfolio companies.
Topping the list is the adoption of new and emerging technologies, which heightens the need to upskill and reskill the workforce in both PE firms and their portfolio companies. Firms cannot fully capitalize on AI and advanced analytics without a talent base equipped to deploy and manage these tools within strong governance frameworks.
Where PE Firms Plan to Invest Most Over the Next 2–3 Years
Leaders in the PE space are prioritizing investments that both mitigate risk and enable value creation. Consistent with our global survey findings, cybersecurity sits at the top of the list, reflecting heightened exposure as portfolio companies digitize operations and integrate AI-driven tools.
Closely linked is data privacy, driven by regulatory scrutiny and the need to safeguard customer and operational data across global jurisdictions. For PE firms, strong privacy controls are essential not only for compliance but also for maintaining trust during M&A and exit processes.
Beyond risk mitigation, firms are investing in business process improvements and infrastructure modernization to unlock efficiencies, optimize costs and drive meaningful margin improvement. These areas directly support portfolio company performance and synergy realization in M&A scenarios.
Contact us to explore the full Private Equity Top Risks analysis to benchmark your portfolio against peers.
Jason Roberts, Protiviti
Jason is the Salt Lake City Office Market Leader and a Managing Director in Protiviti’s Internal Audit and Financial Advisory practice. Contact Jason at jason.roberts@protiviti.com.
Rob Gould, Protiviti
Rob is the global leader of Protiviti’s Private Equity practice. He brings more than 25 years of experience advising PE firms and their portfolio companies on transformation, transaction services and public company readiness. Contact Rob at rob.gould@protiviti.com.