Succession is an important issue facing private equity firms, many of which are still being run by the people who founded them 30 to 40 years ago. For example, Watermill Group is still led by managing partner Steve Karol, who founded the Lexington, Mass. firm back in 1978 with his father. As Watermill's partners approached the age of 60, they began tackling the future of the firm's leadership in earnest. The result is an in-depth leadership training program for mid-level professionals.

As contributing editor Danielle Fugazy reports in this issue's cover story, each of Watermill's six partners teams up with a junior counterpart, who shadows the senior partner to develop the skills necessary to become independently effective in the partner's discipline. Emily Lord, who appears on our cover, worked for two years on deal origination under the mentorship of partner Ben Procter. Today, Lord is Watermill's director of deal origination. Procter still oversees Lord but he focuses more on firm management and transactions. Underscoring the importance of talent development, deep benches are sought increasingly by limited partners.

Another trend underway in the world of private equity is the focus on value through operational improvements. In this issue, you'll find a roundtable discussion sponsored by McGladrey LLP that explores the benefits and challenges associated with different strategies.

Another development we explore here is the rise of multiples, as PE firms and strategic buyers alike strive to put cash reserves to work. "We've seen some multiples increasing since the beginning of 2012 through the current time, in particular with the private equity community getting more and more aggressive," Geoffrey Haydon, vice president of Moss Adams Capital, tells reporter Allison Collins.

This issue also provides a preview of ACG EuroGrowth 2013. The biggest ACG event in Europe to date, EuroGrowth will take place Nov. 12 and 13 at the Sheraton Park Lane Hotel in London. "It will give the opportunity for all our European members to get together with members from throughout ACG in an InterGrowth-like experience," Gary LaBranche, CEO of the ACG, tells assistant managing editor Anthony Noto.