CMC Markets CEO Peter Cruddas and his love affair with London: A poignant day for pro-Brexit industry leader

For patriotic FX industry leader Peter Cruddas, today marks a very important date on the timeline of Britain’s history.

Mr. Cruddas was born in Hackney, East London in 1953 working his way through the ranks of London’s highly technologically advanced and sophisticated financial services industry to his position today, in which he has a personal net worth of over £1.025 billion.

Mr. Cruddas is in favor of Britain exiting the European Union, and earlier this year began to demonstrate his opinion toward this by way of regular commentary on mainstream news channels, and a £1 million donation to Vote Leave, a pro-Brexit campaign.

He is also a founder of The City for Britain, which is a pro-Brexit group made up of executives from the banking and financial services sector in London.

Residing in Hertfordshire, as well as having properties in Monaco and the French Alpine resort of Antibes, Mr. Cruddas is a staunch supporter of his home country, and has committed his career to two of his passions – politics and electronic trading.

At the age of 15, Mr. Cruddas left Shoreditch Comprehensive School in Hackney, with no formal qualifications, and joined Western Union as a Telex operator.

After being made redundant, he ventured into the FX industry, working as a dealer in the FX trading rooms of various banks in the Square Mile, before joining the London operations of Jordan’s Petra Bank in 1989 as Head of FX Dealing.

Less than a year later, Mr. Cruddas founded CMC Markets, his very own company, with just £10,000, driving the company forward for 25 years to its current valuation of £1.2 billion.

In 2011, Mr. Cruddas was appointed Treasurer of the Conservative Party, working closely with Lord Fink, who has raised vast funds for the Conservative Party over the years, and is also active in the FX industry, being the venture capital investor in newly established FX prime brokerage ISPrime.

With regard to how CMC Markets is preparing its operations for the outcome of the EU referendum, Mr. Cruddas said last month that he refutes any notion that a ‘Brexit’ would jeopardize British jobs.

“We’re looking for staff. We’re not getting rid of staff so we wouldn’t be laying people off,” he said.

Mr. Cruddas noted that in the advent of the referendum, traders were still generating high volume, but the actual amounts being traded during the past few weeks have been lower than usual. He considers this to be a form of caution by traders, but believes that once the referendum is concluded, this will improve.

The company continues to invest substantial resources in home-grown technology, which is developed and supported on site in London. CMC Markets’ 133 Houndsditch premises are home to a $100 million proprietary trading system which is hosted in-house, with integral servers and a full support team dedicated to its functionality.

Peter Cruddas shows confidence in London by paying £42 million in cash for Victorian mansion

So great is Mr. Cruddas’ confidence in London as not only a business center for the world but as a city in which to purchase high value real estate, following the company’s recent public listing on London Stock Exchange’s main market.

After a very conservative initial public offering (IPO) by CMC Markets in February this year, in which the company floated 31% of shares at a total of £218 million, the second time that the company has approached public listing with extreme caution after was it was dissuaded from going public in 2006 by advisers Morgan Stanley and Goldman Sachs, the latter of which took a 10% stake in the firm for $140 million in 2007. Post-IPO, Mr. Cruddas has retained majority control.

Just last month, he invested £42 million, which is a significant amount of his personal gain from the flotation of CMC Markets, in a seven-storey Victorian mansion in West London’s Mayfair district.

When purchasing the house, which had been previously owned by Iranian art dealer Nasser David Khalili, Mr. Cruddas would have been subject to a property tax (stamp duty) bill in excess of £5 million.

The home has been inhabited by like minded individuals in its earlier years, having been owned by Conservative Party peer The Ninth Earl of Coventry following its construction in 1890 by Scottish architect James Anthony Balfour.

What will CMC Markets do if there is a Brexit?

As pro-Brexit as Mr. Cruddas may be, he remains a very astute businessman and has also to consider how to serve CMC Markets’ client base in the mainland if Britain exits the European Union.

Earlier this year, FinanceFeeds met Grant Foley, the company’s Chief Financial Officer, who explained that although the vast majority of CMC Markets’ clients are based in Britain, it has a significant client base in Germany too.

On this basis, the company is investigating potential European bases for serving European Union residents if Britain exits the union and MiFID passporting of the FCA license is no longer possible.

The company considers either Ireland or Germany potentially viable, however industry experts that FinanceFeeds have discussed this with have unanimously explained that no firm will go to Germany, because the BaFIN licensing procedure is extremely bureaucratic and expensive, and a CySec license would provide the same market reach and the same client protection, with a far easier means of conducting business.

Interestingly, this is the very first set of circumstances that have concerned Britain’s vast CFD and spread betting firms, with IG Group and CMC Markets both having been very London-centric since their establishment.

Last month, FinanceFeeds reported exclusively on the company’s new institutional service, headed by Richard Elston, who explained in detail the firm’s will to take institutional liquidity to a global audience.

There is a tremendous mid market gap that has been created over the years, especially since SNB, and even before that – Richard Elston, Head of Institutional, CMC Markets.

Prime brokerages have gradually gone away from their position and there is a tremendous opportunity for well capitalized brokers to go down the institutional route” said Mr. Elston.

“We are in a very good position, post IPO and very well capitalised. This is very important as firms offering institutional services to brokerages today have to be a viable place not only to trade but also to place money” he said.

“There is something that is more specific as well which is worth mentioning” said Mr. Elston.

“More specifically, what we are here to do if we are practical about it, is that whilst our experience which spans over 27 years means that we are born out of the retail electronic trading market, we are promoting our position as a CFD house, therefore our ethos is about providing liquidity into the CFD space” – Richard Elston, Head of Institutional, CMC Markets.

Richard Elston details the four elements as to what should position CMC Markets as a choice CFD liquiidty provider

“The first point is our standing as a company which has a combination of financial stability, good reputation, strong counterparty, with marked pedigree in this market place” said Mr. Elston.

“Secondly, we approach the concept of market data with tremendous transparency. Intellectual property with respect from pricing is derived from an exchange source. When that demands that the venue or institution that we pass it to needs a royalty we are happy to do this and the market data agreements we have with brokerages focus on this clearly” said Mr. Elston. –

“As a result of the amount of correctly delivered market data that we have, this means that CMC Markets can facilitate the broadest range of liquidity within the CFD space for API connectivity” Richard Elston, Head of Institutional, CMC Markets

This all bodes well for CMC Markets to take it services to a global audience, and clearly Mr. Cruddas is maintaining a global business view, as well as upholding his perspective that Britain should be independent from Europe.

Clearly Mr. Cruddas has very high confidence in the future talent in British industry, as he has stated his intention to give away £100 million to enable children who come from a background such as his to succeed. Mr. Cruddas does not come from wealth, far from it in fact, having grown up in a public housing project in one of Britain’s poorest boroughs.

To achieve this objective, he set up the Peter Cruddas Foundation, which is chaired by the former Conservative cabinet minister David Young, Baron Young of Graffham.

Mr. Cruddas is the largest individual donor to the Duke of Edinburgh Award International Association, and a board member of the Prince’s Trust.