Daniel Godfrey's widely anticipated The People's Trust no longer intends to list on the London Stock Exchange and the Social Stock Exchange, as it has failed to reach its fundraising target of £125m.
The launch had been approved by the Independent Impact Panel and the trust was set to list its shares on the Social Stock Exchange and London Stock Exchange on 17 October.
It was aiming to raise £125m for the offer period closing on 10 October at a share price of 100p.
Its founder Godfrey, former chief executive of the Investment Association until his departure in October 2015, said: "The People's Trust offered a unique and attractive investment proposition and had attracted a great deal of interest and support. Not least from 2,500 Founders, who collectively contributed over £100,000 towards our set up costs in a crowdsourcing exercise late in 2016.
"There was every indication that had we achieved critical mass, The People's Trust would have gone on to thrive. Disappointingly, this was not to be.
"Unfortunately, retail investor interest alone, whilst substantial, was not enough in the absence of sufficient additional support from institutional investors and discretionary wealth managers."
He said there had been "well into eight figures" raised by retail investors but that he moved his attention away from the wealth management sector when it became clear there was insufficent support.
"We were doing something different, we were asking people to wait seven years to make a judgement on performance, we were choosing the funds, I can see the reasons people may not have invested but I thought we would be able to find a way."
All investors who had subscribed to the listing will receive a full refund on their investment.
Godfrey added: "It is always hard to break the mould. While we have not succeeded on this occasion, the case we have made for a fundamental change in the investment chain has definitely left some cracks.
"Our argument, for the investment chain to abandon its focus on short-term index-relative returns in favour of sustainable wealth creation and the stewardship to support it, has been widely accepted. One day it will happen - to the great benefit of investors, society and the economy.
"My views on the need for greater stewardship and sustainable wealth creation have not changed but whether I can play a role in that or how I can is something I have not yet thought about."
He also thanked the trust's Founders and everyone who has helped him in his attempt to launch the trust, and expressed his "disappointment and regret that we are not
able to proceed".
The People's Trust's absolute return target was set as a total compound return of CPI inflation + 5% per annum after costs, measured over rolling seven-year periods.
Assuming inflation averages 2% per year, the target nominal return was projected to be 7% per year compound over seven years.
Artemis Investment Managers' Mark Niznik and William Tamworth were set to run the UK Smaller Companies strategy, Comgest had been selected to run the pan-European strategy, and First State Investments' Martin Lau and team were chosen to manage the Asia-Pacific including Japan strategy.
JO Hambro Capital Management's Ben Leyland and Robert Lancastle were going to be in charge of the global segment of the portfolio, while Lansdowne Partners had the job of selecting investments for the 'clean energy' segment.
The trust also intended to develop an ISA savings platform (in 2018) as a low-cost, shareholder service to provide simple and inexpensive access to retail investors.
The People's Trust had also partnered with investment platform SyndicateRoom as an intermediary for the launch, enabling its investors to participate in the IPO.
When the launch was announced, Sir Vince Cable, MP, leader of the Liberal Democrats, commented: "The UK needs a radical transformation of capital markets if they are to fulfil their purpose of sustainable wealth creation.
"The current system awards prizes for short-term, relative returns and this comes at a high opportunity cost to long-term productivity and GDP growth as well as poorer returns for millions of pension savers.
"The People's Trust has created a structure and purpose which is able to challenge the present model. Writing as an individual who sought in government to promote 'long-termism' in financial markets I hope that the Peoples Trust will be a success."
Leader of People's Party
Listing two global equities strategies
Aims to encourage competition in industry
Markets went into freefall
Issued 50,000 new shares