by David Teather, The Guardian
Peter Cruddas, founder of CMC Markets, shakes his arm and the large watch on his wrist seems to sparkle.”This one cost me a quarter of a million euros,” he says in a Guardian interview. “It’s a limited edition, platinum Zenith. And it’s number one in the edition. I like watches. I’ve got about 15 watches.”
Cruddas, the son of a Smithfield meat market porter who drank too much, was named the City’s richest man in a Sunday Times ranking, worth an estimated £860m. He still owns 95 per cent of the online trading business he set up without any outside backing in 1989. There was an abortive plan to float the business last year – scuppered by volatile markets. And the process was so exhausting Cruddas will not be trying it again until 2008 at the earliest.
Still, for Cruddas, aside from the watches, there are two Bentleys, the Porsche Cayenne Turbo, the private jet, the homes in Monaco, Antibes and Hertfordshire. “I sometimes have to pinch myself to see how far I’ve come. I mean we’re talking about a 15 year-old Hackney boy that really has started a company that’s worth about £1bn with no investment from anybody.”
He sinks into a beaten-up brown leather armchair, tucks a leg under himself, all the while keeping his single breasted suit buttoned up, and begins to tell his remarkable story.
Raised on a Hackney council estate, Cruddas left his Shoreditch comprehensive at 15. His father was a porter at London’s Smithfield meat market and drank too much. There was little money to go around. His mother, who was an office cleaner, was the backbone of the family. She survived the Blitz, spending days sheltering in Bank tube station. He peppers his conversation with stories about his mum.
His two brothers, including his twin, did what might have been expected and ended up as London cabbies. But somehow Cruddas, who is now 53, defied the odds. He also said that membership of the Scout movement helped him escape a violent home situation. Today Cruddas runs his own online trading business, CMC Markets, and is estimated to be worth £860m. He was named the richest man in the City in a Sunday Times ranking, beating Lord Rothschild into second place. So how does that feel? “Fantastic,” he says with a smile. “Fantastic, fantastic.”
I ask what he spends the money on and he becomes a kid at Christmas. He shakes his arm and the large watch on his wrist seems to sparkle. “This one cost me a quarter of a million euros,” he says. “It’s a limited edition, platinum Zenith. And it’s number one in the edition. I like watches. I’ve got about 15 watches.”
Then there are the two Bentleys, the Porsche Cayenne Turbo, the private jet; the homes in Monaco, Antibes and Hertfordshire. “I sometimes have to pinch myself to see how far I’ve come. I mean we’re talking about a 15-year-old Hackney boy that really has started a company that’s worth about £1bn with no investment from anybody.”
To get to Peter Cruddas’s office, you have to negotiate that unglamorous eastern fringe of the City, where the flash banks and towers fade away to be replaced by lockups and sweatshops. His office window faces east, across the hinterland of Brick Lane and into Hackney.
Over there, somewhere, is the site of the school he went to as a boy, Shoreditch Comprehensive. As Cruddas states later, angrily, it isn’t there any more – an example of this country’s failure to sort out inner-city State education. He’s the classic Cockney sparrer who made it big. We are told by Shares Magazine that Peter ended up redundant by Western Union aged just 18 after which he ‘ended up in a bank dealing room’, again operating a telex machine, before he worked his way up to become a trader. At the time he primarily dealt in the foreign exchange (forex) arena with his last job at the now-defunct Jordanian Petra Bank, which he left aged 35 in 1989 to set up Currency Management Corporation, as CMC started out back then.
He still talks as though he could be manning a market stall on EastEnders – except on the programme they never swear, and Cruddas swears a lot. Not that he cares…
‘I’ve got a £10 million apartment in Monaco, a £5 million house in England, another fantastic house in Antibes, a yacht and a private jet,’ he says, leaning back in his chair, with a huge grin on his face. His fortune is estimated at £320 million but it could be a lot higher. He reckons his company will soon be worth £1 billion – and he owns 100% of it.
In fact, Cruddas is so successful he could soon lay claim to being the richest self-made man in the City – a title currently held by Michael Spencer of Icap. Cruddas is running Spencer close and, at the rate he’s going, will leave him behind.
Today, this son of a Smithfield meatmarket worker will open up for business in China. Later in the year, he will set up another office in Europe. The day we meet, he’s just flown on his own plane from Monaco, where he lives most of the time, to City airport. “One hour and 40 minutes.” A model of the jet sits proudly on his desk. His office is a surreal affair: an antique mahogany desk, old leather chairs, an oil painting, the full range of Louis Vuitton desktop accessories, side tables groaning with family pictures, trophies and awards galore. On three sides, the room is encased in ultramodern floor-to-ceiling glass walls.
Outside, there is a sea of computers and mostly young people, working flat out, taking calls and tapping away.
Some of the awards are from golf, which he plays off a five handicap, soon to go down to three. “I’m getting round in two or three over at the moment,” he says, also letting slip he’s just joined Monte Carlo Golf Club, home to some of the richest golfers in Europe. Others are from business, where he’s been named Entrepreneur of the Year.
In some respects he’s the ultimate Loadsamoney character, unashamedly flaunting his wealth. But there’s a very serious side as well. Cruddas is a formidable businessman; he is intensely driven and, despite his many millions, he has no intention of giving up. “This year I’ll take £25 million out of the company. I don’t know what to do with it, so ideas on a postcard, please,” he says, beaming. He means it – he really doesn’t know what to do with all his cash.
So, how’s he done it? His company, CMC, is a market leader in internet financial spread betting, contracts for difference and foreign exchange. If it moves, he will trade it, apart from sport betting, which he leaves to others.
The rest – equities, indices, derivatives, commodities, oil, currencies – are his domain. CMC is an online market-maker, owner of CMC Markets, a share service for private investors and, in an increasingly lucrative departure, provider of software to institutions to enable them to set up their own trading platforms.
“If you ask us, what we are, I’d say 50% is a broker/dealer and the other 50% is a software house,” says Cruddas. “On the face of it, we look like any other company but our strengths are our technology and the prices we offer.
If you ask our clients, they’ll say it’s our prices they like – but that’s because we’ve developed the technology. It’s the technology that gives us the ability to offer rock bottom prices.
Our unique selling point within the company is technology. Outside the company, it’s our prices.”
CMC makes its money by volume – six million trades last year. “We can process thousands of deals per minute with the minimum number of people. We write our own back office and front office. It saves on overheads and we can process more accurately and more instantly. Very few – if anybody – have this technology.”
By rights, Cruddas should be down there, in the huddled-together East End streets. Instead, he’s up here, in a smart building, with the financial community eating out of his hand. How he got to this position is a story of fierce, burning desire. He grew up in poverty. His father drank what money they had, his mother was a cleaner. He and his twin brother, now a cabbie, had to hold the home together. He left school at 15 and headed for the City, working for Western Union as an office junior. “I did the night shift on Christmas Day at 16.” Then he became a telex operator in a bank.
When he displayed a knack of calling the deals better than the traders, he was allowed to have a go himself. He was a natural. He joined Bank of Iran and then Marine Midland, working as a commodity and forex broker. At 35, he decided to go it alone, starting his own operation, Currency Management Consultants. He hit the big time when the first Gulf War came and he was asked by Arab banks – with whom he had good contacts – to act as a middleman with Western institutions, sourcing foreign exchange for them. A few years later, with the internet still in its infancy, he was shown a fledgling software system that enabled currencies and commodities to be dealt in real time over the internet.
He was instantly grabbed. (Other firms had turned down the idea as unworkable.) This year, he says, CMC will make “£30 to £35 million net. Last year, it was £11.5 million. Next year, it will be £50 million. After that, it will be £100 million”. The company he started, “with 10 grand” will soon be worth £1 billion. “How do you become a billionaire?” he asks, smiling broadly. “Well, I’ve turned down £2 million, £7 million and £50 million for the business. How many people can turn down £50 million? My wife says I should see a psychiatrist. I left school at 15 and I’ve always wanted to prove I’m a bright guy. I believe in what we do – and I love the adulation.”
There are those in the City who turn up their noses at this “geezer”, who operates at the speculative end and on the internet.
Cruddas doesn’t care. “The City isn’t sure what we’ve achieved. A part of the City doesn’t like us. Their attitude is, ‘we’ve got a nice cake here guys, let’s not make it smaller. There’s a bit for you and a bit for us’. And then I come along and undercut them.” He laughs. And he’s off at a tangent, again. “You know, if you want to succeed in business, you must never be undercut. Not ever. If you allow somebody to undercut you, you’re vulnerable.”
He’s got four children by two marriages.
“I drip-feed ’em. They all want their own careers and want to make their own way in life. Giving ’em money isn’t a good way to bring ’em up.” Still, he muses: “They quite like being in the Bentley and going on holiday in the jet.”
What does the future hold? He has thought in the past about floating the company but so far it has come to nought.
“I guess one day I will because I will have to reward the staff with shares.” He’s in no hurry, though – he’s enjoying the thrill of the battle too much. “I live in Monaco and I play golf, but I don’t want to give the impression I don’t work hard. I never stop.”
His and the company’s difficulty, he says, is being so good: CMC can’t recruit staff fast enough. “We’re looking for 50 to 70 people. We’re crying out for more people. Right now, our biggest problem is having too much business and not enough people. We’re trying to keep up.”
That afternoon he was flying to China, which is where he will be today. He’s going scheduled long-haul. “If I went in my own jet, I’d have to stop to refuel.” He adds, as an afterthought: “I’m going first class.” Naturally. And why not?.
Dapper
He was named Entrepreneur of the Year this month by Management Today. “I’m thrilled with any recognition. Sometimes this country doesn’t recognise people that have achieved a lot.”
Cruddas pronounces each word deliberately but still with a clear London accent, the odd “fings” instead of “things”. He admits to a weakness for nice clothes. He is wearing a sharp tailor-made blue suit from Hong Kong – although he generally prefers Armani – black brogues and a slightly rakish silk handkerchief poking out of his jacket pocket. His brother used to call him Brett Sinclair, the dapper character Sir Roger Moore played in The Persuaders.
CMC is based in what looks like a salmon-coloured castle, rising up next to an abandoned and overgrown lot. The business is in Aldgate, where the City melts away into neighbouring Tower Hamlets and where blond wood bars sit next to dingy pubs with an England flag in their windows. It is not far from where Cruddas was brought up but he rarely makes the short trip back to Hackney. The last time he did some years ago he was surprised to find parts of it getting trendy when all he had wanted to do was escape.
Cruddas launched CMC with just £10,000 in 1989 and has built the business into one of the world’s leading online trading firms with partnerships in more than 30 countries. CMC enables investors to trade just about anything, including shares, commodities, oil, currencies, derivatives and Treasury securities. It also offers “contract for difference” products and financial spread betting; allowing ordinary investors access to areas that were once the preserve of big institutions. According to the company’s website, it deals with more than 26 million trades each year. It has an estimated worth of £1.25 billion. [2012]. The company has today been floated on the London Stock Exchange.
Cruddas headed to the City after leaving school and landed a job as a telex operator, tying up deals for traders. He worked a bank of 10 telex machines and the firm pulled up the carpet so he could rapidly wheel himself from one to the other on his office chair. He got his break and began trading commodities and foreign exchange. “I liked the instant success of getting something right.” He worked for firms including Marine Midland and Bank of Iran. At 35 he decided to set up on his own.
The catalyst for CMC’s growth was the internet – Cruddas launched the firm’s online foreign exchange trading platform in 1996. “As soon as I saw the internet I couldn’t believe how good it would be for the business. I saw it instantly.” The net allowed real-time pricing and dramatically cut costs, widening the potential investor base and allowing CMC to steal market share from banks, which were slow to catch on.
Cruddas is not bashful about his achievements but neither is there a hint of arrogance. His brothers, he says, do not begrudge him a penny of his success, partly because it meant his parents would never have to worry about money in their retirement. “They are proud. They are very good really. You would think they would be jealous but they’re not. Are we close? Not really. But then we’re not distant. They are hard workers. They don’t want anything from me.”
Most of the time he lives in Monaco but insists he does pay tax for the time he is in Britain. He says he doesn’t mix with the growing number of British businessmen based there. “I don’t really know anybody. I’m not really a networker. I don’t go down the pub. My life is about family and business.”
Aware
He has donated millions to the Prince’s Trust and the Duke of Edinburgh’s Awards to give other young kids from underprivileged backgrounds a leg up. “What I like about the Duke of Edinburgh’s Awards scheme is that I can honestly say that if I hadn’t been in the Boy Scouts I wouldn’t have been as successful as I am now. Getting out of the inner city made me realise that there is a lot more to life than coming home to arguments and rows and an alcoholic father and no money.”
His daughter Annabel was the first in the family to go to university. He is twice married and has four children. “Yes, they have had a completely different upbringing to me. What I try to do is teach them the value of money. I’m the one who goes around turning the lights off. If you started with nothing, you are very aware of it and you want your children to be aware of it. Maybe my children’s children will be nightmares, but my children are certainly very well grounded and work very hard in school.
“I don’t think like a billionaire because I am still working very hard. I’m not lying on a beach in Spain. I don’t have a chauffeur. I travel by private jet because I work so hard I need the convenience. I don’t have a cook or a butler. I took down the Christmas decorations last weekend and I took 10 boxes down to the cellar – I didn’t have someone to do that for me. I’m a worker. It is nice to have comforts; when I travel long haul I go first class. But I don’t have a gaggle of servants waiting on me. And I think that’s key. It keeps my feet on the ground.”
He knows his life makes a good story, pulling out themes with the skill of a literature student studying a text. The company is like an extended family, he says. “With business I found I probably got the adulation and the rewards and recognition that I didn’t get growing up in a difficult home, and I like that. The other reason I like having my own company is that probably deep down I am a very insecure person because I like to be able to control my own destiny and future, because then I don’t have to deal with adversity and disappointment.”
He says he has turned down three offers for the business: the first at £2m, the second at £7m and the third six years ago for £50m. “There are very few people in this country that can turn down £50m but I believed that I could make the company worth a lot more,” he says. “I’ve got what I want in life, to be honest. My motivation now in the next 10 to 20 years is to build CMC up into an even bigger and better company.” His wife, quite naturally, had questioned his sanity when he turned the last offer down. Other than that she has always been very supportive. “Put that in if you could,” he says and he gives a little wink.
The CV
Born
September 1953, Hackney, London
Education
Shoreditch comprehensive (despite academic ability, he left school aged 15 because he needed to earn money).
Career
1970-1982 Telex operator at Western Union, then trader at banks including Bank of Iran and Marine Midland
1982-1989 Chief dealer with SCF Equity Services
1989 Starting foreign-exchange dealing company Currency Management Consultants, later shortened to CMC; developing software for financial trading on the internet. CMC Markets is now worth around 780.71M
1996 Launched online foreign exchange trading platform
Family
Married to Fiona, four children, including two from a previous marriage
Wealth
Mr Cruddas, is ranked 90th in the Sunday Times Rich List having amassed wealth of about £850 million. In 2006, he was described as the richest man in the City. In the United Kingdom he has in the past enjoyed “non-domiciled” status, meaning he avoided paying full income tax. Cruddas owns a £10m apartment in Monaco, top, a £5m house in Hertfordshire, an apartment in central London and a home in Antibes. A private jet and a yacht help him travel between destinations. His watch collection alone is said to be worth £3.5m.
Politics
Recent figures [2012] put him down as the largest donor to the Conservative Party. From January to March of 2012, he donated the Tories £215,244.
Charity
Cruddas was involved in several charities, including the Duke of Edinburgh’s Award, The Prince’s Trust and Great Ormond Street Hospital. He also established The Peter Cruddas Foundation, which helps disadvantaged young people.
Hobbies
Golf, Arsenal
