"You know this coffee is more expensive than oil," Peter Cruddas says, brandishing a paper cup of Starbucks coffee. It is the sort of statement you would expect from the man who lays claim to being one of the richest men in London's financial district and the founder of derivativestrading group CMC Markets.
Cruddas - worth more than £800 million ($2.2 billion), according to the Sunday Times rich list - was here to promote his derivatives trading platform to local financial market punters.
His company has pioneered the use of so-called contracts for difference. These are high-risk securities allowing investors to benefit from rises or falls in shares or bonds without needing to invest in the securities themselves.
CMC Markets launched here about six months ago and is part of a rapidly expanding network of offices around the world. Cruddas said opening an office here was a no-brainer despite fears of a contracting sharemarket.
"There is a good education system, a good regulatory structure and a strong broadband infrastructure," he says, adding performance of the local operation has exceeded expectations.
The platform - which runs across the internet - could potentially be run remotely from London but Cruddas decided to open here because punters were more likely to use it if it operated under a local regulator and funds were held in accounts onshore.
The market for CFDs is booming because they represent a much lower cost trading alternative than the trade of underlying physical securities. In the UK, CFDs skirt around taxes on share trades such as stamp duty.
Cruddas was born to a Smithfield meat-market porter and a cleaner and left school in the East End at 16 to help support a family that included his cab-driving twin brother. After starting out as a Western Union telex operator and various front and back-office jobs in banks and brokerages, he launched CMC in 1989 with £10,000.
CMC Markets started as a foreign exchange trader but, in 1996, branched out into online trading of shares, currencies, gold, oil and spread-bets.
