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In spite the general notion that Brexit was mostly supported by the poorer and older Brits, the “Leave” campaign had its filthy rich City backers (and financial contributors) too.
Among the more prominent names on the list are those of CMC Markets’ (LON:CMCX) founder and majority owner Peter Cruddas and Peter Hargreaves, founder of the financial adviser company Hargreaves Lansdown. The latter is also second-largest donor to the Leave campaign with a donation of GBP 3.2 million. Cruddas was a bit more modest and donated only GBP 1 million to the campaign. But now both are also among the biggest losers in the market turmoil following the shocking Brexit results, according to the Financial Times.
Cruddas, who floated 31% of his forex and spread betting brokerage on the London Stock Exchange at GBP2.40 in February, but kept, along with his wife Fiona, 62.5% of it, lost a total of GBP 30 million as of Wednesday. In the immediate aftermath of the Brexit news hitting, CMC Markets, which is in the FTSE 250 index, lost GBP 100 million of its value, before recovering somewhat. Still, between June 24 and 29 CMC Markets’ shares lost 6.15% of their value and stood at GBP 2.57 per share and a total market capitalization of GBP 742.84 million.
Ironically, just two weeks before the EU referendum on June 23, on the day CMC Markets reported strong FY 2016 results, Cruddas told Reuters he was optimistic, no matter what the outcome of the vote was. He was, in fact, referring to the future of the company.
“From a business point of view we are not concerned about it (the referendum) at all,” he said. “We think from a volatility point of view it will generate more business for us.” He also told Reuters he was in no way directly involved in the Leave campaign and was full-time busy with CMC Markets. “I’ve helped them raise money and I definitely don’t regret it. I think we’ll win, I think we’ll Brexit,” Cruddas told Reuters. Indeed they did. But Peter Cruddas lost GBP 30 million of his personal fortune in the process.
At the same time Peter Hargreaves, the majority owner of the financial consulting company Hargreaves Lansdown (LON:HL) that serves mostly retail customers and offers investment opportunities in funds, stocks and shares, forex and pensions, suffered a far more painful blow.
In the immediate aftermath of the referendum the value of his 32% stake in the company, featured in the FTSE 100 index, fell by about GBP 400 million, before rebounding. By Wednesday morning Hargreaves’ loss was somewhat reduced – to just GBP 330 million. He told The Independent he had no regrets about donating to the Leave campaign. “I didn’t do this for personal gain. I thought it would first and foremost be good for Britain,” Hargreaves said.
Overall, the Standard & Poor’s Dow Jones Indices reported that on Friday, June 24, from the global equity markets were wiped off $2.08 trillion. This is the biggest daily loss ever – worse than the Lehman Brothers bankruptcy during the 2008 financial crisis and the Black Monday stock market crash of 1987.