Investment: Lord Cruddas set up his financial services firm with £10,000 in 1989
On the day that multi-millionaire entrepreneur Lord Cruddas sold a stake in his company for £180 million, he enjoyed a glass of champagne with his wife – and then he went straight back to work.
Now 69, the Conservative life peer tells Donna Ferguson the best year of his life was when he turned down £50 million for his financial services firm, CMC Markets.
He still owns a majority stake, which is worth £700 million, and lives in a £42 million house in Mayfair – a far cry from the estate in Hackney where he grew up.
What did your parents teach you about money?
Very little because we never had any money. I was brought up on a Hackney council estate where we had to put money in a meter for electricity and gas.
My mum used to get up at 5am to go to work cleaning offices. My dad was a meat market porter during the day and worked in a pub in the evenings. He was an alcoholic. So even though my parents had three jobs between them, money was tight.
Every penny my dad got, he spent on booze and fags. There were always arguments about how much money he’d give my mum.
We never had a car and I never went to a restaurant until I was about 20. We didn’t have central heating, so we only had a bath on a Sunday when we put the immersion heater on. Instead of buying packets of biscuits at the supermarket, Mum would buy a bag of broken biscuits at the market.
Back then, there was no child allowance and it was considered disrespectful to claim benefits. I don’t think we even had free school meals. My childhood experiences taught me not to waste money and the importance of supporting your family. The lesson was: whatever Dad did, do the opposite.
Have you ever struggled to make ends meet?
I left school at 15 with no qualifications. That was a big mistake. I should have left at 14 – I wasted a year. I got a job in the City, working for Western Union, sending telegrams and money payments. I lived in a council maisonette near Liverpool Street with my parents, and walked to work. It was tough until I got my first pay packet. After that, I earned £7 or £8 a week, which I’d give to my mum. She would give me half back, which would get me through the week. I learned that money can change your life.
Work hard, get more money in your pocket and you get more choices and opportunities. Learning that was liberating for me and that’s one of the reasons I’m a Conservative. I think governments should allow people to decide where they’re going to spend their money. I believe in low taxes and tax breaks to invest in pensions and your home.
What’s the biggest payday you’ve ever had?
The day I listed my company on the London Stock Exchange in 2016. I sold 25 per cent of the company and took £180 million.
To celebrate, my wife and family came to the London Stock Exchange and we all had a glass of champagne after the shares were listed.
I then went back to work. By that time, I was rich anyway and had been successful for a long time. So I just got on with it.
What was the best year of your financial life?
It was 2000. That was the year I turned down an offer of £50 million to sell my company. At the time, I was a 100 per cent owner. You try turning down £50 million when you’ve come from nothing. I did have a few sleepless nights about it, but I was confident in my company.
Since then, I’ve made hundreds of millions of pounds out of the company. It is now worth £700 million and I still own 65 per cent of it.
What is your biggest money mistake?
Not buying 10 per cent of Arsenal Football Club for £40 million when I had the chance in 2006. I turned it down. The club must be worth over £2 billion now.
The most expensive thing you bought for fun?
I have got watches worth hundreds of thousands of pounds, I’ve got cars worth £300,000 to £400,000. But I would say the most extreme thing I ever bought myself for fun was a round of golf for £50,000, at one of the world’s most famous golf courses in the US with one of Britain’s greatest all-time golfers. I can’t say who it was, but he won the game quite easily.
I was a little bit overwhelmed. But, I’m the envy of all my friends at the golf club.
The best money decision you have made?
Starting up my company with £10,000 in 1989, and keeping control of it.
At first, we were a boutique operation. But in 1994, I read about the internet. Thanks to my work at Western Union, where telegrams were sent from office to office using ticker tape machines, I instantly understood how powerful the internet was going to be.
I saw how, instead of machines sending information from office to office, it could go from person to person.
So I invested in finding developers and set about building Europe’s first-ever internet trading platform to buy and sell financial products. Now we have offices in 12 countries around the world, and more than a million clients.
Treat: Lord Cruddas spends £100,000 on a skiing holiday at Badrutt’s Palace in St Moritz
Do you save into a pension or invest in the stock market?
I used to save into a pension. My pot is maxed out now – it’s probably about £2 million.
Since I hold 65 per cent of my company in shares, I like to be a little bit risk-averse with the rest of my personal wealth, because I’m running lots of risk in the company on a daily basis.
I do buy and sell stocks and shares through my private wealth account at Goldman Sachs and a few other banks, but I’m not an avid investor.
Do you own any property?
Yes. My family home is an eight-bedroom house in Mayfair, which cost me £42 million in 2016. I paid £5 million in Stamp Duty. I don’t care whether it’s gone up in value or not. I don’t buy property for investment.
My ten-bedroom country house in Hertfordshire cost £1.4 million in 1994 and I expect it’s worth £10 million now. I also own a five-bedroom house in the South of France, which is right on the beach.
What is the one little luxury you treat yourself to?
A £100,000 holiday in the mountains in St Moritz in Switzerland. I’ll go for a week or ten days at Christmas, stay in Badrutt’s Palace hotel, ski in the sunshine and go walking around the lake.
If you were Chancellor, what is the first thing you would do?
Abolish inheritance tax. People might say, oh well, you would say that because you’re going to leave your kids a lot of money. I’m resident and domiciled in the UK and I pay millions in taxes every year. When I listed the company, I paid £50 million in tax.
I believe in paying taxes. It makes life easier. You can sleep at night. I don’t do any dodgy offshore schemes. It doesn’t matter to my family whether they pay inheritance tax or not, they are going to be well-provided for.
I would abolish inheritance tax because it penalises people who work all their lives and have already paid tax on the money they leave their children.
Do you donate money to charity?
I set up the Peter Cruddas Foundation. The charity is only funded by myself, and over the past ten or 15 years we have given around £20 million to more than 250 charities. I like to help children from disadvantaged backgrounds, so we’ve given to, for example, Magic Breakfast and The Prince’s Trust.
What is your number one financial priority?
To carry on working. Even though I’m 70 this year, I’m not going to retire. I do not need the money, I want to work to lead a happy life and to help my children and grandchildren improve their lives. I love working, I love my company and I love being in the House of Lords.
