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Cruddas City deal sparks £1bn charity pledge

Finance | Gemma Ware | 1 Nov 2007

The City entrepreneur Peter Cruddas greeted news that he had netted millions from a business deal last week with a pledge to give away £1bn to charity over his lifetime.

Cruddas, founder and chairman of the spread-betting firm CMC Markets (pictured), sold a 10 per cent stake of the company to the investment bank Goldman Sachs on Friday, earning himself a personal windfall of £140m. The deal is expected to take his fortune to over £1bn.

However, Cruddas, who already had a taste for philanthropy after donating £100m in 2006 to set up the Peter Cruddas Foundation which gives grants to young people’s charities, said he did not expect to spend the money on himself.

“I’ve never been part of the City circle. I’ve just worked hard and knew I would surface to be a major player in the financial markets,” Cruddas told the Financial Times. “I’m not too materialistic, I don’t want the biggest yacht in the harbour. I’m hoping in my lifetime I’ll be able to give away a billion to charity.”

Cruddas, 54, is the son of a Smithfield meat market porter. He was raised in London’s East End and left school at 15 to help support his family. In 1989, with £10,000, he set up CMC as a foreign exchange company; this week’s deal with Goldman Sachs valued the company at around £1bn-1.4bn.

His £1bn pledge comes months after Scottish entrepreneur Sir Tom Hunter committed to give away the same amount to good causes during his lifetime.

Meanwhile, Goldman Sachs has set up its own foundation, just as it is expected to announce a series of record-breaking bonuses to its top executives.

The firm’s 300 partners have agreed to commit part of their bonuses to charity, and Goldman Sachs expects that the fund will grow worldwide to more than $1bn over the next few years.

Partners’ donations will be voluntary, though if they do elect to donate they will give a fixed amount, which the firm will set at its year-end in December.

The foundation, Goldman Sachs Gives, was registered as a charity in the UK in July under the name the Goldman Sachs Charitable Gift Fund (UK) with the purposes of helping education, relieving poverty and advancing religion.

Alongside staff donations, the firm will make its own donation to the foundation. The amount has yet to be decided, but it will be separate from Goldman Sachs's existing charitable giving and matched giving programmes. 

Lloyd C. Blankfien, chairman and chief executive officer of the Goldman Sachs Group, who earned US$54m last year, said Goldman Sachs Gives marked an “innovative step” in the firm’s tradition of giving to charity.

“Goldman Sachs has been fortunate to produce strong financial results in recent years and we want to support non-profit and other charitable organisations in a meaningful way,” he said.

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