Indeed, according to a 2013 Natixis survey, 84 per cent of US financial advisors have spoken to clients about alternative investments, indicating a growing demand for access to related asset classes.

However, access to private securities has historically been limited due primarily to an 80-year-old ban on the marketing of such investments. This ban was lifted in July 2013, as required under the 2012 Jumpstart Our Business Startups Act, which was established to help start-ups and small business with regard to financing regulations.

Companies and investment funds are now allowed to advertise private securities to the general public via the Internet or other social media platforms – so long as the buyers are qualified institutions or “accredited” investors.

And as technology continues to bring transparency and increased access into the investment landscape, seeking to capitalize on the trend is New York-based DarcMatter, a transactional platform launched last year that provides “institutional-level” access to alternative investment funds for accredited investors.

Its goal is to “democratize the private markets” by providing opportunities for investors to participate in alternative assets that were previously not easily accessible without committing large amounts of capital or having direct connections to the issuer.

DarcMatter’s founder and chief executive, Sang Lee, believes that the biggest hurdle to providing comprehensive investment advice on alternatives has historically been information asymmetry and opacity in the marketplace.

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DarcMatter sources deals through channels including SEC-registered entities, direct private issuers and financial institutions representing private companies and pooled funds. It aggregates and administers individual investments as a single Limited Partnership, providing investors with access to venture capital, private capital and hedge funds. Meanwhile, institutional investors and family offices can also directly access the offerings without having to use feeder funds.

The DarcMatter platform currently features $156.5 million in live deal flow through feeder structures and standalone venture capital and hedge fund offerings. The firm is also in active conversations with issuers representing approximately $285 million in upcoming pipeline deal flow, taking combined live and pipeline deal flow volume to $441.5 million. Maintaining the current CAGR, the firm anticipates that total live offerings will surpass $6 billion in the next four months.

“Now that managers can spend less time raising capital and accessing capital markets, that could be a huge win for both sides of the alternative market universe,” Lee told Family Wealth Report. “Previously there was a lot of 'back room' discussion – deals were discussed and carried out very privately.”

Lifting the ban has therefore created what Lee described as an “ecosystem” because it not only enables individuals to raise capital more efficiently online but it also injects a high dose of transparency into the alternatives universe.

To clarify, Lee defines alternative investments as investments that are not one of the three traditional asset types of stocks, bonds and cash. DarcMatter does not does not deal with traded, liquid alternatives or REITS, being exclusively focused on the illiquid spectrum. On its website, the firm highlights that yields in more liquid assets in the public markets have declined due to a shortage of supply, while yields in less liquid parts of the market have risen .

In terms of the cost for using the DarcMatter platform, managers and private issuers that are looking to have their own offering of securities on the platform pay $2,500 a month to post details. Meanwhile, individual accredited investors that invest through feeder structures have a built-in fee of 0.5 per cent – or 50 bps – a year, and a capital processing fee of 1.5 per cent as well.

As for market competition, Lee said that new developments launched by more traditional financial services firms are probably DarcMatter's biggest business threats.

“We see a bit of movement in the brokerage world whereby placement agents and investment banks are developing digital platforms,” he said. He also added that, while not so much of a threat per se, the “very fragmented” nature of the sector has proved disconcerting to some investors who are still coming around to the open marketplace idea.

“But if you look at what dark matter is in the physics sense of the word, it’s an undetectable force that comprises 70-80 per cent of the universe and governs most of the physics world that we see today. This is what I think a lot of the alternative market universe is doing today in terms of serving the financial services industry,” Lee said. “It’s interesting that the alternatives market is called the alternative one when in fact it is kind of the primary.”

With the digitization of business development and deal sourcing activities making private market investments more accessible, DarcMatter is not alone in its endeavors to tap into this trend.

Peter Lehrman, chief executive and founder of Axial, recently  spoke to Family Wealth Report about how family offices are embracing the notion of “discoverability” when it comes to sourcing investment opportunities.

Although family offices tend to have what Lehrman described as a “semi-public profile,” they also want to be able to put themselves “in the right place at the right time” to net compelling investment opportunities.