In dealmaking, 2013 begins on a bit of a somber note. The flurry of M&A enjoyed in the fourth quarter and motivated by the near-certainty of higher taxes in the new year gives way to a pause in transactions that some say will last longer than the usual January lull. And, while the presidential election is over, its impact on the private equity industry may have only just begun. With Bain Capital co-founder Mitt Romney's bid for the White House came unprecedented attention on the PE industry and the enormous wealth it produces. During the hotly contested campaign, practices that were previously known only to those inside the industry, such as carried interest, were debated in broader circles, with many people in the general public leaving the debate convinced that PE pros get an unfair tax advantage. Whether carried interest - the method by which PE firms make money - continues to be taxed under capital gains (currently at 15 percent but scheduled to increase to 20 percent on Jan. 1 and likely to be increased further), or is shifted into ordinary income, or edged into its own hybrid category, it will almost certainly be taxed higher than it is today. In this issue's cover story, contributing editor Danielle Fugazy explores carried interest and the other issues that may affect dealmakers as Congress and President Barack Obama consider tax reform.

Also in this issue, we turn to contributor Robert Teitelman for a look back at the last 15 years of M&A and a look ahead at what may come. "It is hard to dispute that M&A has matured, just as swaths of Silicon Valley have matured," says Teitelman, who served as editor-in-chief of The Deal since its first issue as a daily newspaper in 1999 until its 2012 sale to TheStreet Inc. (Nasdaq: TST). "But, even with a less rigorous antitrust policy, or reduced taxes, or greater economic certainty, it's difficult to envision the kind of M&A growth over the next 15 years that we saw in the past, particularly in the U.S." M&A will continue, but perhaps not quite at the same pace.

With this issue, SourceMedia and ACG are pleased to inaugurate a new chapter in our long-standing partnership. ACG members will continue to receive independent, in-depth coverage of the news and trends making an impact on middle-market dealmaking through SourceMedia's monthly magazine, Mergers & Acquisitions, and our daily website, themiddlemarket.com. Also, beginning this spring, ACG members will receive a new, digital publication from ACG, Middle Market Growth, which will feature ACG-related news, views and featured content. We are excited about this new stage of the relationship between ACG and SourceMedia.

Here's wishing all a happy and healthy new year!

-  Mary Kathleen Flynn, Editor  in Chief of Mergers & Acquisitions

Financial services industry