Peter Cruddas just wanted to make his mum proud when he started his business, but taking delivery of the first EV Rolls-Royce will soon be another sign of his success. With an estimated net worth of US$1.3 billion, he joins Forbes Australia’s Successful Thinking column to discuss his motivations as an entrepreneur and why he never wants to retire.
Peter Cruddas, 69, is the founder and CEO of online broking company CMC Markets. He left his local school in east London aged 15 to take a job as a telex operator for Western Union in the City of London. In 1989, he founded what later became known as CMC Markets and in 2002, the company opened its first overseas office in Sydney. He is currently here in Sydney updating staff about the company’s further expansion plans.
CMC Invest is the largest bank-agnostic retail stockbroker in Australia, according to Investment Trends / IRESS turnover data, and from October 2022, it is transitioning ANZ Share Investing accounts to CMC Markets Invest, with the transaction expected to complete by the end of March next year. CMC Invest platform has over 40,000 instruments across 15 international exchanges.
He became a Member of the House of Lords in 2021, as Lord Cruddas of Shoreditch, and he has been a strong supporter of former prime minister Boris Johnson. He says that “as a Conservative Party member, donor and conservative Peer, I am disgusted by the parliamentary party constructively enforcing the removal of our democratically elected Prime Minister, Boris Johnson”, labelling the move as “anti-democratic”.
“There’s a lot of nonsense going around about the British economy. The British economy is not in recession. It’s growing. We’ve got the lowest inflation rate out of all the European Union countries, the lowest unemployment rate in 40 years. A million job vacancies in the UK. All the government had to do was hold its nerve, but a few plotters and schemers saw an opportunity to dislodge the Prime Minister. It’s a disgrace.”
What was the most formative thing in your childhood that made you want to succeed in business?
Very simple. I wanted to help my mum and I wanted to make her proud of me.
That is the truth of the matter.
She died in 2001, but she saw the success I had, and I’ve just kept going.
How have you managed to keep CMC Markets building on its success in the various regions in which it operates?
First of all, I am an entrepreneur. The DNA of the company is being an entrepreneur. You employ good people, and here in Sydney, the head of the APAC region (Matt Lewis) is a very good person, a very hard worker, but you give them the freedom to make decisions within certain boundaries, that aren’t written down, but they know what’s right and they know what’s wrong. It’s the opposite of being a control freak.
You give them resources, you give them money, you give them technology, you give them product, and then they develop it from there. In theory, if 99% of our business is done on the internet, why do we need a Sydney office? The reality is clients need local contacts, local bank accounts, local regulations and they need Aussies in Australia picking up the phone. You can’t cookie cut this business.
You can’t replicate what we do in London in Australia because people have different outlooks and there are different types of products in different jurisdictions. You have to mould your local office around the products that clients trade.
There’s always the generic products. Everybody wants to trade Tesla and Facebook and Dow Jones products and Nasdaq products and gold and oil and commodities.
Where you’ve got a big hub office, and that’s what Sydney is, you get good people, and Matt has been with the company for 20 years, and you give him autonomy, you treat him like an entrepreneur and he knows that 24/7 he’s got backup from me and anyone else.
I’ve seen young people come into this company at 20 years of age and they’ve grown up with the company. They’ve been trained and they deliver for the company. This is not a charity. The deputy CEO David Fineberg, I remember interviewing him, he was about 18 years old. He’s been with the company for more than 25 years.
I remember one person telling me that when he joined the company, he was renting a flat with his wife and daughter. He told me how he’d now bought a home and a second home as an investment property. He said it was the security of the job and the company that had enabled him to move forward. He said he knew the pay cheque would hit the mat every month and with that it gave him the confidence to plan and build his life with his family.
I love working with the people in the company. I challenge them. They challenge me, but they have to be right, because I am normally pretty on top of things.
I love this company. I don’t want to retire. I am 69 years young. My wife of 35 years said don’t stop working, it’s right for you. She said I would get bored. I love holidays, but two weeks is enough. I love coming home. I’m not a workaholic. I enjoy my life. I have to devote some time to the House of Lords. I go there a couple of days a week, mainly in the afternoons. I have a passion for what I do. You keep developing things, you keep launching technology, and the world opens up to you.
What characteristic of yourself do you think is underrated by other people?
I think people get surprised by my ambition. A few years ago, we had record profits during Covid. We absolutely smashed it. We made 150% more profit than we would normally do. I’m a heavy investor in the company so I took that extra cash and I employed 600 people to launch our investment platform in Singapore, Canada, Dubai, the UK and New Zealand. I could have made an acquisition, but I thought, this is a one-off profit that we might never see again, so let’s use that extra profit.
In the UK our investment platform has only been going for a month. Is it financially viable? No. Will it be in the future? Yes, of course.
One of the big advantages of continually investing in technology is that it means you can do things, it provides scale in the business. We took a lot of the protocol from what we operate here in Australia and took it to the UK. It cost us less than US$10 million to launch that share trading platform, which is pennies compared to what it would cost other companies to do the same because we have all the plumbing, and all the pipework and all the infrastructure already built.
If we want to open a stockbroking business in New Zealand or Singapore, let’s do it. We’ll do it well and it will pay for itself. We are such a mature company now, we can do things and not worry about the consequences. It’s minimal risk. That’s five new investment platforms in five new jurisdictions within two years, hopefully within 18 months.
Our B2B offering is quite an important part of the business. We have partners around the world where we can execute their trades for them, give them a frontend or they can use their own frontend and connect to ours. In the next couple of years, it could be the biggest source of clients and income for us. We own it all, we build it all, it’s a great opportunity for us.
Is there anything in your daily routine that keeps you sharp, sane and motivated?
I’m not a drinker. I’ve seen the damage it can do. Read my book, Passport to Success: From Milkman to Mayfair (published by Biteback Publishing), and you will understand why.
I’m a very disciplined person. I’m not obsessive. I live for my family. My kids are grown up, 32 and 34. The youngest is a vascular surgeon for the NHS, the other one just had a baby, our first grandchild. I go to bed early, 10pm or 10.30pm. I don’t tend to go out Monday to Friday. I always take my wife out Saturday evenings and I play golf Saturday mornings. I walk the golf course. I try to limit my diet and walk a lot. I always wake up at 6am. My kids would joke, when we went on holiday and I would have a glass of red wine, they’d say I could have more, but it’s a mental block for me. I always drive if we are going out.
We don’t have a driver. I am going to get the first electric Rolls-Royce, the Spectre. I’ve seen it. I drive now a Rolls-Royce Wraith Cryptos. There’s only 50 in the world, and I got No.1 in Britain. I’ve had that about two years. I also bought a Black Badge Cullinan, and that is my favourite car. It’s a Rolls-Royce 4WD/SUV. I love that car. But I am excited about the Spectre.
They’ve said delivery (of the Spectre) should be in about a year from now. They rang me and offered it to me. I asked them to send me a picture and they wouldn’t. No pictures, they said. I said how do you expect me to buy it and they said it was the first battery car from Rolls-Royce, it will be super special, you’ve got first dibs, do you want it? And I said, all right then, I’ll have it. So I sent them a deposit of 20,000 (pounds). It took me a year to see the car at the Goodwood (West Sussex, UK) factory, and honestly, it is a beautiful car. The whole underneath is a battery because there is no engine. Believe me, I bet it will be quick.
I like nice cars. I love the old E-type Jag. The one car that I always liked and never had is a white Triumph Stag. I couldn’t afford it when I was younger.
If you had $10,000 to invest, perhaps for a niece of nephew, where would you invest it (anything other than CMC shares listed in the UK)?
I’d probably buy a decent bottle of wine as an investment. I’m not a connoisseur of wine, but if I can’t buy CMC stock … well, it’s yielding 5% at the moment.
Maybe season tickets for Arsenal (Football Club).
Really, if you were going to get into the market now, don’t overleverage. You’re going to have to invest this money for at least three to five years. I think the UK market is undervalued. A lot of money has been pouring out of the UK market to the US market where the valuations are really very high in the US. I think the value is in the UK market. I would buy a UK FTSE tracker fund because if you look at the multiples of British companies they are very, very low. Our market cap is 700 million pounds – and these are approximate numbers – we have 400 million pounds owned cash. We make about 100 million pounds a year, so the enterprise value of the company is 300 million pounds. We’re effectively only yielding three times our profits. Too low, so I would buy a UK tracker fund and hopefully we’ll see a good recovery in the next three to five years.
This is an edited version of the conversation.
This article represents the views only of the interviewee and should not be regarded as the provision of advice of any nature from Forbes Australia. The article is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. Past performance is not necessarily indicative of future performance. You should seek independent financial and tax advice before making any decision based on this information, the views or information expressed in this article.
Seek independent advice and consider the relevant Terms and Conditions at cmcmarkets.com.au when deciding whether to invest in CMC Markets products. CMC Markets Stockbroking Limited (ABN 69 081 002 851 AFSL No. 246381).