Spain and Gulf Capital: A Longstanding Economic Conversation
The modern history of Spanish democracy, in many ways, mirrors the influence of petrodollars on a nation’s economy and its businesses. For cultural and historical reasons, ties between the Gulf states and Spain were fluid throughout much of the 20th century. Beyond the opaque links between oil money and political power, the era of petrodollars truly began in the mid-1980s with the liberalization of Spain’s economy under the government of Felipe González. Early investments evolved into deep, productive relationships between major Spanish corporate groups. A clear example is the enduring alliance between Cepsa and Mubadala, the sovereign wealth fund of the United Arab Emirates, which became a minority shareholder in 1988. More recently, Qatar has expanded its footprint in firms such as Iberdrola. The Qatari investment arm also holds stakes in notable companies like the Prisa group and El Corte Inglés. By the middle of a given week, Saudi Arabia announced a capital injection into Telefónica totaling 2.1 billion dollars. Cumulatively, these investments amount to roughly 16.577 billion euros.
During the 1980s, the Kuwait Investment Office, the Kuwaiti government’s investment arm, acquired control of the Catalan firm Torras Hostench and became part of a broader wave that included Cros, Ebro Foods, and Explosivos Rio Tinto. Mergers with Cros helped form the holding company Ercros. The architect of this rapid expansion, which transformed the KIO Group into Spain’s largest industrial conglomerate in the early 1990s, was financier Javier de la Rosa. He was a trusted figure among Kuwaitis and a defining character in Spain’s business culture.
A steady flow of Gulf capital has endured since the KIO era and now sits among the country’s leading groups. BlackRock stands as one of Ibex’s biggest shareholders, with close to 20,000 million euros in its portfolio. Qatari money also plays a central role in several flagship Ibex 35 companies, with the Qatar Investment Authority owning up to 9,000 million euros either directly or via linked entities. Since 2011, it has been a shareholder in Iberdrola and currently holds about 8.7 percent of Ibex. Its stake in other large Iberian firms includes stakes in the Colonial real estate group at around 19 percent, valued near 570 million euros, and in the Spanish-British airline group IAG at roughly 25 percent, valued at approximately 2.359 billion euros.
Other notable investments backed by Qatari capital appear in El Corte Inglés and the Prisa media group. Sheikh Hamad Bin Jaber al Thani holds roughly 11.07 percent of El Corte Inglés, though the Spanish retailer agreed in June 2022 to repurchase 5.53 percent of its capital for about 387 million euros. In Prisa, Khalid Thani Abdullah Al-Thani holds around 4.91 percent, valued today at about 19 million euros given current prices. Qatari funds have also backed hospitality ventures, particularly in Barcelona. Qatar Diar invested up to 200 million euros for a hotel project in the city, while Marriott sold the Renaissance Barcelona hotel to the Qatar Investment Authority for 78.5 million euros in 2014.
Apart from the prominent Gulf investment arms, Mubadala maintains a minority stake in Enagás at roughly 3 percent, valued by the company’s market capitalization. The Emirates also hold shares in Cepsa, initially controlling the full capital but selling 37 percent to the Carlyle Group in 2019 for about 2.9 billion dollars. At current market prices this translates to roughly 4.9 billion euros for the Saudi participation in the energy company.
The KIO Era and Its Aftermath
For KIO and Javier de la Rosa, media attention peaked in the late 1980s as one of their investment trusts, Cartera Central, helped drive a merger project among the major Central banks and Banesto. That move threatened to elevate a then-young financier, Mario Conde, to leadership of Spain’s biggest banks within months.
KIO’s trajectory was remarkable from beginning to end. Its top manager in Spain, Javier de la Rosa, faced dismissal in 1991 and 1992 amid accusations of embezzlement and fraud by Saudi authorities. Torras Group faced the largest payment suspension in Spain at the time, with liabilities listed at 243,000 million pesetas, a figure that would be equivalent to about 1.5 billion euros by today’s reckoning.