Let's start with the good news. In our cover story, "Six Signs of Recovery," contributing editor Danielle Fugazy reveals that a handful of key sectors, including real estate, energy and emerging markets, are fueling a rebound in private equity fundraising. With fundraising 15 percent higher in 2012 than in 2011, "we have reached a new normal," says Kelly DePonte, a managing director with placement agent Probitas Partners. "The boom period was driven by a highly liquid debt market, which created a frothy private equity market, but that fundraising market was an aberration. We are not getting back to 2007 and we shouldn't. We are in a good place now."

The uptick in fundraising may augur well for future M&A, but the present remains sluggish. In "Q1: Volume Down, Value Up," assistant managing editor Anthony Noto writes that the first quarter was slow for the middle market. The pause in dealmaking was all the more striking after the bustling fourth quarter, when many an M&A practitioner tried to capitalize on favorable tax regulations in 2012. The quarter delivered a disappointing 9 percent decrease in volume over the same quarter the previous year. More encouraging, however, is that deal value was up slightly up, with 3 percent growth. Beyond the middle market, we also saw a few large transactions that have observers wondering if the megadeal is making a comeback.

One area that remains a bright spot for dealmaking is digital. For more on the opportunities inspiring acquirers, read "Consumers Drive M&A in Digital Media," our coverage of the ACG New York's Third Annual Digital Media & Technology M&A Conference. Panelists discussed how some startups, including Outbrain Inc. and Pinterest, as well as a few more established players, such as eBay Inc.'s (Nasdaq: EBAY) GSI Commerce and Netflix Inc. (Nasdaq: NFLX), are leveraging the proliferation of mobile devices and the rise of consumer choice. And check out "Yahoo Continues Startup Buying Spree" to see how Yahoo Inc. (Nasdaq: YHOO), led by relatively new CEO Marissa Mayer, is snatching up hot properties.

In other news, the Association for Corporate Growth (ACG) continues its efforts to influence public policy regarding privately-backed companies. In "Experts Corner: Winning Over Washington," a Q&A with ACG chairman Charles Morton highlights the second annual Middle-Market Growth Policy Summit.

Finally, in her Finance Finesse column, reporter Allison Collins looks at how more lenders are getting Small Business Investment Company (SBIC) licenses, as bank consolidation continues and lower middle-market businesses seek financing.

Mary Kathleen Flynn

Editor in Chief

Mergers & Acquisitions | TheMiddleMarket.com

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