Interview: Peter Cruddas, CMC Markets – Dressed for success, spread-betting tycoon who’s walking tall once moreComments Off on Interview: Peter Cruddas, CMC Markets – Dressed for success, spread-betting tycoon who’s walking tall once more
On that weekend more than two years ago, the ex-trader’s wife was shopping in Rome (“It sounds extravagant; it was”) but he planned to whisk her off to their favourite Hotel Splendido in Portofino. A glorious spot in which to lie low — but Mrs Cruddas was having none of it.
“She put her foot down and said no way,” explains Cruddas, who founded City spreadbetting firm CMC Markets 25 years ago. “She told me to walk into that company, hold my head up high and prove to those people you are fine. It is not just about you, it is your company. She practically frogmarched me in that Monday.”
Cruddas has walked tall ever since. Not only has the former Conservative Party co-treasurer cleared his name by defeating the Sunday Times in a High Court libel action, but CMC, where he retook the helm at the start of last year, has rebounded strongly into the black.
One of the City’s most successful self-made men is riding high on a new boom.
His 500 staff split record bonuses last year and Cruddas, 61, who owns 90% of CMC, pocketed the lion’s share of a £12 million dividend, the first in six years, after a prior £4 million loss turned into a £32.8 million pre-tax profit. Despite wider market wobbles, the firm has just decided to pay a £6 million interim dividend too.
The Hackney-born tycoon believes it is no coincidence that the firm smartened up its profits because he told staff to smarten up their act. Out went working from home. So too did free fresh fruit in the office.
“I said if you want a nice lifestyle, go and work for Google or Apple,” says Cruddas, whose corner office, thickly carpeted, contains an intricate portrait of himself made from a single piece of cloth. He is well-built, bespectacled and suited.
“I see it as a reflection of your attitude. If you get out of bed and have a shave and put on a smart suit it means you are ready for work. When I see people here dressed scruffily, I think their attitude is wrong. And it worked, to be honest.”
Cruddas, who left school at 15 and founded CMC with £10,000 in 1989, also changed the management, reinstalling himself as chief executive and committing himself to the company for the next decade.
“When I was chairman, I felt that I had to constantly back [the management] even when I saw things were not right,” he explains. “Actually, I am less stressed now by being the chief executive because I can change things.” After a few fallow years, the City is on the up. “It is booming. It is much harder to recruit staff and to get into some of the restaurants, but it is buzzing.”
That revival has helped Cruddas’ foundation, which has donated on average £100,000 to 140 charities and has a target of giving away £100 million over the next 10 years.
However, he has two concerns. One is that it has become far harder for people to break into the industry.
“I really don’t know if I could afford to start this company today, which is sad. If you were developing your own IT platform you would need £5 million to £10 million probably. [My] £10,000 wouldn’t even pay the legal fees.” In the old days, “you didn’t necessarily need a university degree to get into the City.
There were lots of schemes to get in through apprenticeships or as a junior office worker or you could become a messenger and deliver cheques. I think the barriers to entry for young people are much, much higher.”
Cruddas found his first job working the night shift for Western Union, the money-transfer company, after answering an ad in the Evening Standard. He was made redundant at the age of 18 but soon found a new role in a bank dealing room, where he worked as a telex operator, later becoming a trader. At 35, he struck out on his own to set up CMC.
His other worry now is Europe. Cruddas has joined the board of Business for Britain; the body is pushing for a better EU deal on behalf of the business community.
“This is the financial capital of the world but it is slowly being eroded by regulations from Europe,” he says. “This country is synonymous with financial services and we should be allowed to protect that. If you go to France, the French are allowed to protect their farming. If you go to Germany, the Germans are allowed to protect their manufacturing.”
He regards the introduction of a financial transactions tax — a blueprint is due by the end of the year — as evidence of “some sort of conspiracy to suppress the City”.
So Cruddas is back campaigning again, even if his relationship with the Tories remains brittle. After being awarded £180,000 in libel damages plus £1 million in costs, “David Cameron invited me in for a cup of tea and apologised and thanked me for not suing him for vicariously defaming me.” But he hit out publicly after the party tried to make amends by offering him a junior post, or “an embarrassing tombola prize”, as he put it.
“People have asked me if I would donate to the Conservative party and I would still like to but I cannot donate while the issue is unresolved between myself and the party,” he says. “They offered me a role which I felt was demeaning of my status and I said I’d rather leave it unresolved. That was September last year and I have heard nothing since.”
Cruddas gained favour after raising £2.5 million for the Tories’ successful No campaign in the referendum over scrapping one person, one vote that had been championed by the Liberal Democrats. Does he believe that raising cash from wealthy donors is the best way to fund political parties? “My experience is that any donor I have come across is genuine. They are not looking for anything else in return. They want to help their party.
“The problem is donors and the way political parties are funded is a very easy target for the press when they want to create mischief and last year, while Leveson was going on, there was a lot of mischief to be created.”
The only alternative he can see is “the public would have to fund it and I don’t think there is any appetite [for that]; they would rather the money go into schools or hospitals”.
For the time being, Cruddas’ focus has swung from Westminster back to the Square Mile, where CMC is hiring staff and might pursue a £1 billion stock market flotation within the next three years.
He looks out across the bank of screens on the trading room floor and adds: “Honestly, I wish I had come back sooner.”
LIFE AND TIMES
Left school at 15, found his first job working the night shift for Western Union, the money-transfer company, after answering an ad in the Evening Standard. Moved to a bank dealing room where he worked as a telex operator, later becoming a trader.
1989 set up CMC with £10,000
Married with two children. Relaxes by playing golf off a handicap of four. He says: “I don’t switch off on holiday because when you have your own company it is ridiculous to think you can do that for two weeks.”