Duke Street Capital, the pan-European private equity firm, is the latest to join the new private equity gold rush to Spain. The country was one of just a handful of European markets where the value of private equity investments for the first half of 2001 overtook the previous year's first two quarters.

Indigenous private equity houses are raising their biggest funds. Mercapital, a buy-out firm established in 1987, closed Spain's largest country fund last December at &euro600m ($536m). Europe's international players have taken note, especially as European expansion is mostly a mature game in northern Europe.