Cohen & Co. has merged in Arthur Bell to create one of the largest accounting firms specializing in auditing mutual funds, exchange-traded funds, hedge funds and investment advisers.
Financial terms were not disclosed, but the combined firm will have nearly $100 million in annual revenue, servicing more than 1,000 funds and 1,500 businesses around the U.S. It will have approximately 32 partners and 550 staff members.
Cohen, based in Cleveland, ranked 69th on Accounting Today’s 2017 list of the Top 100 Firms, with $60.1 million in annual revenue.
The two firms have worked closely together in recent years and gotten to know each other well. “This has been a wonderful four-year relationship,” Cohen CEO Randy Myeroff told Accounting Today. “There have been lots of discussions and lots of exploration. We’ve shared expertise over the years. We’ve referred clients over the years. We’ve had a heck of a lot of fun in social settings over the years, and we just found the right time when it really worked for both firms to come together.”
He sees the two firms complementing each other in the types of financial industry clients they service. “The real driver is that we have had a dominant position in the registered fund industry—mutual funds and the like—on the Cohen side and have grown superfast,” said Myeroff. “We have a great reputation, great client list, great people as an important part of our practice, and the Arthur Bell folks have been an absolute leader in the private fund space, in hedge funds and commodity pools. They’ve gotten to be a thought leader in the cryptofund world, which is pretty new and developing. Putting those two sets of expertise together just opens up an entire new world of expertise for our existing clients, as well as for the market in general.”
In addition to servicing over 1,000 funds, the firm also caters to 1,500 private companies. “On the Cohen side a significant part of our practice is more traditional tax and advisory for entrepreneurial companies,” said Myeroff. “That’s where we started back in the ’70s, and that’s still an important part of our practice.” Private equity firms and real estate firms are becoming an important part of Cohen’s private company practice, he noted.
He added that both firms have young leaders in their mid-30s to mid-40s. “They have a ton of runway, a ton of enthusiasm for the market, and the ability to attract great talent both out of school, as well as really important lateral talent, to help us be smarter more quickly,” said Myeroff. “And the leadership at Cohen is virtually identical. It’s a very young group in that investment industry practice.”
Bell managing member Cory McLaughlin also saw great possibilities in combining with Cohen after meeting with Myeroff and Chris Bellamy, president of Cohen’s Investment Industry Services Division. “From the Arthur Bell side, in meeting Chris and Randy and other leadership within Cohen, it was very desirable for us to become a part of that. Our vision and our goal have been to be the industry leader as it relates to the financial services space, and more specifically the alternative investment industry. Cohen has very much emerged as a leader within the public fund world, and they have a strong desire to also be the firm of choice as it relates to the investment industry as a whole. When you combine those two sides wanting that, with the young leadership, what an awesome opportunity for us to really make a statement to the marketplace and say we’re here and we’re going to be the choice firm in this space. We feel like there’s a real desire for individuals to have a firm that has that experience and expertise that’s focused solely on the investment industry space and can do that in a nimble and non-bureaucratic way.”
Bellamy pointed out that both firms remain CPA firms, registered with the Public Company Accounting Oversight Board, despite specializing in investment firms. “Our focus is on the investment industry, so our client base on the Cohen side is typically registered mutual funds and ETFs, and on the Arthur Bell side, it’s alternative investment vehicles, typically hedge funds, commodity pools, private equity, etc.,” he said. “When you look at the investment industry, we see it as two halves to the industry. We dominate one half and Arthur Bell does the other. Bringing the two of us together will put us in position to be one of the few firms that can service the whole industry to the depth that we can.”
