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.

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