Cohen & Co. Gets Private Equity Backing

Cleveland-based Cohen & Co. is the latest to enter the private equity frenzy, as the top 50 accounting firm said on Oct. 25 that it has received a strategic growth investment from Lovell Minnick Partners (LMP), a private equity firm focused on investments in financial services, business services, and financial technology companies.

Financial terms of the deal, which is expected to close on Dec. 31, weren’t disclosed. The transaction is subject to standard closing conditions.

Cohen & Co. is the second big accounting firm to announce a private equity deal in the past week. Top 20 firm Armanino said last Friday that it has received a minority investment from Further Global Capital Management, a New York-based employee-owned private equity firm that makes investments in businesses within the financial services industry.

Cohen & Co. said the funding will help meet the growing needs of clients across the firm’s many key industries and geographic markets, as well as provide capital for investments in technology and an expansion of service offerings. The firm specializes in services for the mutual fund, private equity, alternative investment, and real estate industries, and its clients include closely held businesses, family offices, and high-net-worth individuals.

The investment from Radnor, PA-based LMP will also accelerate Cohen & Co.’s multiyear strategic plan focused on growth, people, technology, quality initiatives, and service area interests of its clients, the firm said.

Chris Bellamy

“LMP will be a valuable strategic partner, offering a unique perspective on our industry and the clients we serve, along with a dedicated focus on human capital, which is crucial to our growth strategy as an employer of choice,” Cohen & Co. CEO Chris Bellamy said in a statement. “We are proceeding with conviction into this new chapter, motivated to work harder than ever for our stakeholders—our clients, our employees, and our communities—to honor their trust in us and deliver value to these critical relationships.”

LMP partner Jason Barg said, “Cohen & Co.’s vision for the future and its longstanding reputation as a premier accounting, tax, and advisory firm make them an ideal partner.”

“We are excited to collaborate with Chris, the management team, employees, and clients to continue to build on their successes and support their growth trajectory,” added LMP principal Tom Hutchins.

After the deal closes, Cohen & Co. said it will “substantially increase” the number of employee equity holders at the firm.

“We are extremely proud to reward our exceptional team for the successes that have brought us to this point,” Bellamy said. “The increase in equity holders, combined with substantial reserves for future equity-based incentives, will further strengthen alignment as we work together to achieve our strategic goals.”

In addition, Cohen & Co. will operate in an alternative practice structure. Cohen & Co. Ltd., a licensed CPA firm, will provide attest services and be led by Vince Curttright, currently partner in charge of the firm’s assurance practice. Cohen & Co. Advisory LLC, not a licensed CPA firm, will provide business tax, advisory, and other non-attest services and be led by Bellamy. Although separately owned and governed, the two entities will both use Cohen & Co. as their brand name.

Allan Koltin, CEO of Koltin Consulting Group, who has consulted with Cohen & Co. for more than two decades, said in a statement to CPA Practice Advisor that he expects this combination to propel Cohen from a top 50 CPA and advisory firm nationally to a top 25 firm over the next five to seven years.

“I can’t think of a better strategic combination than Cohen and Lovell Minnick,” he said. “Cohen is recognized as a firm with great leadership and is viewed as a ‘destination place’ for young, talented entrepreneurs. Lovell Minnick is known in the private equity and accounting communities for their deep understanding and ability to work with professional and financial services firms.”