Private equity firm implements sustainable enterprise risk management (ERM) program
Learn how a large private equity firm with several portfolio companies harnessed ERM to enhance governance and risk management.
Client background and need
Enterprise risk management (ERM) programs can provide private equity (PE) firms with an approach for managing business risk of its operating companies. When PE firms invest in operating companies, they are seeking to maximize the company’s value and position it for future buyers. Buyers consider many factors when determining whether to purchase a company – how a company manages risk to achieve its target level of performance can be one considerable focus area. If a company has an immature or non-existent ERM program, it may adversely affect a company’s value. Therefore, PE firms expect that their portfolio companies develop and implement ERM programs to support the identification, assessment and management of the unique risks to which they are exposed.
