Firm Overview

SDS’s innovative impact funds provide transformational capital to projects and companies—each with a distinct geographic focus and investment strategy targeting specific returns and impact goals—with an overarching focus on alleviating poverty, achieving racial equity and promoting economic mobility in diverse low-income communities.

Generating positive impacts for low-income people and communities of color is central to SDS’s fund management philosophy. As a fiduciary, our passion for impacts does not override our responsibility as stewards of our investors’ capital. We continuously improve and implement best practices for originations, due diligence, underwriting (pricing-to-risk), and asset management. We generate market rates-of-return by investing where others do not: lower-middle market investments in impoverished, highly-distressed urban and rural communities. Our 82 direct investments are in communities that are on average 61% minority and 34% African American with 31% poverty and 13% unemployment. For example, the impacts of ASREF I’s investment in Selma, Alabama facilitated the rebirth of the St. James Hotel, located at the foot of the Edmund Pettus Bridge where Civil Rights protestors were beaten on Bloody Sunday (1965): 44 jobs created, catalyzed development in a boarded up downtown (population: 94% African American and 54% poverty rate).

1. Our impact funds are uniquely innovative. For instance, the first-of-its-kind SDS Supportive Housing Fund uses market-rate private equity and zero taxpayer dollars to finance 100% of acquisition and construction costs for permanent supportive housing (PSH). These units are 1/3 of the cost ($200,00/unit vs. $500,000+) and constructed three times faster than typical PSH in CA—a new paradigm for homeless housing. 2. SDS develops and manages distinct impact funds needed in various markets. 3. SDS Advantage ($557M) provides finance and back-office support to other impact funds. 4. SDS manages an impact reporting division to serve clients and our own funds.  5. SDS’s funds focus on racial equity in historically underinvested, underserved communities of color while performing to targeted market rates of return. For instance, ASREF & ASREF II have created 336 jobs and 1,610 affordable housing units in communities that are on average 80% minority with 36% poverty.