According to the offer document the capital protected, global shares fund had to reach $3 million to get off the ground.

As reported earlier the Securities Commission forced Hanover to pull its ads and replace them, claiming they were potentially misleading.

"The success of the fund was clearly impacted by the intervention of the Securities Commission on our advertising part way through the acceptance period," Hanover Funds Management chief executive Perry Cornish says.

While the fund was unsuccessful, Hanover remains positive about the product and its move into funds management.

Cornish says "investor response was positive and has demonstrated that there is a definite place in the New Zealand investment scene for capital protected investment products."

He "strongly believes in the potential for alternative asset classes" and says a new fund will be launched in the New Year.

This fund will be different to this first one.

It appears future funds will be more tailored towards the adviser market, rather than Hanover’s direct investors.

"We will work closely with brokers to introduce a portfolio of products in 2007 with features that are more appropriate to the financial intermediary market," Cornish says.

People who invested in this first fund will receive their money back, plus interest.