Cohen & Co., a Top 50 Firm based in Cleveland, is the latest firm to receive a private equity investment, in this case from Lovell Minnick Partners.
LMP is a New York-based private equity firm that focuses on investments in financial services, business services and financial technology companies. The amount of the investment was undisclosed, and Cohen did not reveal whether or not it represents a majority or minority stake in the firm. The investment is expected to close on Dec. 31, 2024, at which point the firm also plans to substantially increase the number of employee equity holders.
“We’re excited to take on a strategic investment from Lovell Minnick Partners to help drive the firm to the next level and continue on into the future,” said Cohen & Co. CEO Chris Bellamy in an interview. “We’re excited to take on the capital and invest in technology, process improvements, identify potential add-on acquisitions, as well as potential lateral hires, as we have a really good track record of doing both. We’re excited to adopt the new model, expand our ownership group substantially as a result of the transaction, and position the firm for future success.”
Like several other accounting firms that have accepted PE funding, Cohen will set up an alternative practice structure. Cohen & Company, Ltd., a licensed CPA firm, will provide attest services and will be led by Vince Curttright. Cohen & Co Advisory, LLC, not a licensed CPA firm, will offer business tax, advisory and other non-attest services, and will be led by Bellamy. Although separately owned and governed, the two entities will both use Cohen & Co as their brand name. Under this new structure, partners and professionals of Cohen & Co will continue to work together serving clients.
Chris Bellamy
“We will split into the traditional alternative practice structure, with Cohen & Co. retaining the attest firm, and Cohen & Co. Advisory LLC becoming the advisory and tax entity,” said Bellamy. “We’re targeting a 12/31 close, which will align with the restructuring as well.”
The firm plans to use the extra funding to grow. “We will continue to invest in the firm through technology improvement, expanded staffing and continue to grow via acquisitions as well as attract lateral hires,” said Bellamy.
Jason Barg
LMP partner Jason Barg led the investment into Cohen & Co. “Our view is that Cohen is really well positioned for taking on a private equity partner, and the additional capital will help an already established and growing firm to continue on that trajectory and even accelerate it,” he told Accounting Today. “Cohen has got a great history of serving its clients, being known for its specializations and high-caliber personnel, and we believe the funding will further enhance that market position.”
Cohen & Co. has been expanding its SEC audit practice, coming out in first place last year by a wide margin, according to an analysis by Ideagen Audit Analytics.
Cohen & Co. periodically does mergers and acquisitions. Last year, it added Szymkowiak & Associates CPAs and its affiliate, Pear Consultants LLC, in Buffalo, New York, as well as BBD’s Investment Management Group, a Philadelphia-based provider of audit and tax services for registered and unregistered investment companies. In 2017, it added Arthur Bell, a firm that specialized in auditing mutual funds, exchange-traded funds, hedge funds and investment advisors. The BBD deal yielded 54 new audit clients. Overall, the firm brought on 62 new engagements last year, and netted 57.
More mergers are likely as a result of the extra funding. “We are always strategically evaluating opportunities in the marketplace, and we’ll continue to do so,” said Bellamy.
The firm had been mulling PE funding for some time. “As part of our regular, ongoing planning exercise, our board and our leadership team have continually evaluated strategic alternatives, including taking on private equity investment as well as other potential scenarios, and that’s been something that’s been ongoing for the better part of 12 months,” said Bellamy. It has also been a regular exercise that the firm has done over its 47-year history,
As far as areas of the country or specialties where the firm might expand, Bellamy said the firm would continue to evolve and be responsive to the needs of its clients. “We have several national industry verticals and we’ll continue to focus on growth, as well as growing within all of our existing geographic markets as well,” he added.
Cohen & Co. was founded in 1977 and has more than 800 dedicated professionals across the U.S. and 12 offices in Illinois, Ohio, Maryland, Michigan, New York, Pennsylvania and Wisconsin.
“One of the things that really attracted LMP to Cohen is that within the verticals that they focus on, whether it be real estate or some of the other areas of focus, it’s a firm that really has a national caliber,” said Barg. “It’s well known within its sectors, beyond its regional hubs. We knew of Cohen & Co. for many years because of that capability. We knew them as an industry participant for many years and thought really highly of them. We do think it’s a strong launchpad to further build on those capabilities.”
One of the reasons why Cohen & Co. was attracted to LMP was its expertise in servicing middle market companies as well as its involvement in the financial services arena, Bellamy noted, adding that LMP has significant overlap with several of Cohen’s key areas of expertise.
The firm had been hearing overtures from various PE firms. “From the Cohen side, we’re always open minded and have had several conversations with market participants over the history of the firm,” said Bellamy. “We have known of LMP through some mutual relationships, and we’ve had mutual clients that we’ve also interacted with, so it was easy to pick up the phone when we received the inquiry,”
LMP had also been looking at CPA firms. “We as investors have spent a lot of time working in this specialty consulting area, working with human driven, people driven businesses,” said Barg. “Given the growth trends in the sector, the benefits of taking on capital and the fragmentation of this space, we believe that a well-positioned CPA firm has a great opportunity for growth. We’ve talked to a number of firms over the years, and we hit it off with Chris and his colleagues. We thought very highly of the firm before we got to even know them on a personal level, and then we developed a dialogue leading into this investment. It became very clear that we see the world the same way. We have a strong alignment in terms of where Chris and his colleagues want to take the business. It made the transaction discussions and investment discussions very straightforward. From our standpoint, we became very enthusiastic about partnering with this group of people.”
“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,” said Tom Hutchins, a principal at LMP, in a statement.
Cohen & Co, also liked LMP’s background. “LMP’s experience operating in regulated industries was really important to us,” said Bellamy. “We are a significant public company auditor, given the stature of our registered fund practice and the background and the due diligence and the homework that the LMP team has done in the space were truly refreshing, and their willingness to collaborate with quality and risk management top of mind is really important.”
Hunton Andrews Kurth LLP served as legal counsel to Cohen & Co, for the deal, while Sidley Austin LLP served as legal counsel to LMP.
“We’re truly excited for the future,” Bellamy said. “We’re looking forward to enhancing our ability to achieve our strategic plan, to be a premium provider of services in the markets and industries we serve, to drive operational excellence and to be the employer of choice, and we’re excited that LMP will be our partner along for the ride.”
The International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.
The IAASB is asking for comments via a digital response template that can be found on the IAASB website by July 24, 2025.
In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.
President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an analysis from the Institute on Taxation and Economic Policy.
The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings.
Trump has imposed the steepest U.S. duties in more than a century, including a 145% tariff on many products from China, a 25% rate on most imports from Canada and Mexico, duties on some sectors such as steel and aluminum and a baseline 10% tariff on the rest of the country’s trading partners. He suspended higher, customized tariffs on most countries for 90 days.
Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.
Food prices could rise by 2.6% in the short run due to tariffs, according to an estimate from the Yale Budget Lab. Among all goods impacted, consumers are expected to face the steepest price hikes for clothing at 64%, the report showed.
The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.
Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist Schellman do more things with fewer people, allowing the firm to scale back hiring and reduce headcount in certain areas through natural attrition.
Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time.
“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said.
One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load.
“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai.
Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies.
“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.
However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area.
“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai.
As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales.
“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai.
While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves.
“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”