Blackrock and Blackstone: The 'unknown' multinationals controlling Spain

Blackrock is the world's biggest financial investor. It's so big in fact that it has upwards of 9 trillion in assets spread across the globe, roughly equivalent to the GDP of Germany, France and Italy combined. For context, that would take the Spanish economy around six years to produce.

The company's footprint in Spain is no smaller, however, and it's growing. Blackrock has interests all over the Spanish economy, whether it be in energy companies, stakes in its major banks, or the properties it owns. Critics fear this level (and breadth) of influence has an impact on decision making that can indirectly affect Spaniards in all walks of life.

For example, Blackrock has a 5 percent share (or more) in Santander, BBVA and Caixabank, Spain's three major banks. This means that any loans or mortgages there could, in theory, be impacted by Blackrock - a foreign company with no connection to Spain besides investing there.

Blackrock also has a significant share (of up to 20 percent) in Naturgy, the Spanish energy company.

It also has shares in 19 of the IBEX 35 companies (Spain's equivalent of the FTSE index). What's slightly different about the Naturgy move is that Blackrock will be on the company's board, something that hasn't happened yet in many of its other Spanish investments, and would likely signal a change in its approach to investments in Spain.

All in all, it is estimated that Blackrock has invested as much as €60 billion in the Spanish economy. But at what cost? Investment firms, let alone one of the world's biggest like Blackrock, don't part with money without expecting anything in return.

So, how is it controlling Spain?

Controlling Spain

Some feel that Blackrock, as well as other shadowy investment firms such as Blackstone (more on them below) leverage their investment for their interest -- often to the cost of Spaniards.

In an article for El Salto, Carlos Martín Urriza, Economy and Finance spokesman for Sumar, posed the following questions:

"Is the fact that Spanish banks have not increased the remuneration of household savings with the rise in interest rates - as has happened in Europe - but have increased the cost of their mortgages, and nothing effective has been done to correct this, related to the fact that Blackrock has a 5 percent or more stake in Santander, BBVA and Caixabank?"

He goes on: "Is the fact that the profits of Spanish electricity and energy companies far exceed those of their European counterparts connected to Blackrock's holdings of more than 5 percent in Enagás, Iberdrola and Repsol?"

Urriza's argument is essentially that owing to the profit-motive driving Blackrock and other big funds, as well as the pressure applied by them, their influence makes gas and electricity bills, as well as things like mortgages, loans, house prices and rents more expensive. When these companies are so big and have their fingers in so many pies, it's hard to see how to stop them.

However, the Spanish government has flexed its muscles in recent weeks with regards to takeovers, largely through the SEPI (Sociedad Estatal de Participaciones Industriales) as it did with the recent proposed Telefónica takeover.

READ ALSO: Spain takes stake in Telefonica after Saudi deal concerns

The biggest private landlords in Spain?

Housing has become a big issue in Spain in recent years. With rents rocketing in the post-pandemic period and an influx of foreign remote workers further pricing out locals, affordable housing and price speculation have become a hot political issue.

There's another American investment giant called Blackstone (often confused with Blackrock) which secretly dominate the property market in Spain. In fact, Blackstone is the second biggest landlord in the entire country after Caixa Bank.

Blackstone, through 27 subsidiary companies, has 19,600 homes for rent, of which 13,000 are in the Madrid region alone, where it is "the largest private landlord" in the city, according to Civio.

Some argue its Spain's biggest property owner, having carried out more than 146,000 property purchases over the past decade.

With calls for deep and meaningful housing reform in Spain (not that the government hasn't tried) will any government or bank be able to realistically do anything when financial investment firms worth more than entire countries can pull the strings? 

Over the past few years, tenants renting Blackstone flats in Madrid have faced rent hikes of up to 60 percent and evictions for those who can't afford it.

Blackstone general director in Spain Fernando Bautista has denied that his company is a vulture fund, recently declaring "at the end of the day, we have been investing in the country for 10 years, both in real estate and infrastructure or other sectors within the business we do. We are not a speculative fund as we have been here for more than ten years, we are an investment fund".

Now Blackrock is also preparing to enter the residential market in Spain. This was made clear by Adolfo Favieres, Managing Director of real estate at Blackrock, at an event in January.

The executive stated that the investment fund has its eyes set on the "living" and "flex-living" market. "It is the one we like the most, both flex living (co-living) and student residences," he said.