RealLeaders Magazine Highlights SDS Capital Group in January Issue of Top Impact Companies
January 8, 2025
RealLeaders Magazine Highlights SDS Capital Group in January Issue of Top Impact Companies
SDS Capital Group spurs economic development in distressed communities
By Hannah Blume
Jan 8, 2025 | 1:22 P.M.
Deborah La Franchi, CEO and founder of SDS Capital Group (#57 on the 2025 Top Impact Companies list), is a pioneer in the field of impact investing. For the past 20 years, La Franchi’s firm has made a name for itself by focusing on underserved communities across the United States, with a specific goal to address the deep challenges of poverty and inequality.
“I wanted to start my own company and create a platform of these impact funds in different geographies of the country and with different investment strategies, but all of them focused on investing in the poorest communities of the United States,” La Franchi explains.
SDS Capital Group has launched numerous impact funds dedicated to empowering disadvantaged populations, ranging from affordable housing projects to subsidizing small business lenders. These funds are designed to have a broad impact across essential areas like education, healthcare, and nonprofit services.
La Franchi’s vision for impact investing is deeply rooted in her personal experience. Growing up in California, she saw firsthand the challenges posed by poverty and knew as early as high school that she wanted to dedicate her life to finding solutions to these systemic issues. As CEO of SDS Capital Group, La Franchi has focused on tackling one of the state’s most pressing problems: the housing crisis.
California faces a significant shortage of affordable housing, which has led to high levels of homelessness. To help combat this issue, SDS Capital Group created the Supportive Housing Fund (SHF), a $190 million initiative aimed at financing high-quality and cost-effective housing for homeless Californians. Its focus lies in creating permanent supportive housing by not only providing shelter, but also serving as a catalyst for community revitalization. These apartments provide tenants with on-site case management support to rebuild their lives as well as healthy food options and health services.
SDS Capital Group finances its projects through private-sector equity, eliminating the need for taxpayer dollars. This allows SDS to deliver affordable housing units quickly and efficiently without getting bogged down by bureaucratic red tape. SHF is expected to finance over 1,800 units across California, making significant progress in combatting the state’s housing shortage.
The journey to building a successful impact investment firm has not been without its challenges. When La Franchi first started SDS Capital Group, she miscalculated the size and enthusiasm of the impact investor community. While there were federal regulations that required certain investors to direct funds toward low-income communities, investors who were not bound by these regulations displayed little interest in such opportunities, even when shown the financial returns alongside the social impact.
SDS realized that to attract investors, it wasn’t enough to simply offer competitive returns — they also needed to understand the broader value of impact investing. Investing in affordable housing offers diversification benefits to an investor’s portfolio while also contributing to long-term economic stability in distressed communities. “They have to believe that the investment makes sense,” La Franchi says.
She says SDS Capital Group has built its success on a few key operational principles:
1. Document everything. One of these is ensuring that every procedure is documented in its software. Though tedious, having well-institutionalized processes ensures continuity and consistency across the organization, making the onboarding process of new employees much smoother.
2. Implement the latest cybersecurity tools. The firm is committed to cybersecurity, even if that means outsourcing to experts in the field to keep wire transfers and other sensitive information protected.
3. Get the right people in the right seats. It’s tempting to hold on to an employee in the hopes of them eventually growing into a role, but not everyone is going to be the right fit for your organization. Making timely decisions about employees can have a profound impact on the overall success of the company, La Franchi says.
SDS Capital Group is not just working to generate financial returns for its investors, but to ensure that these returns contribute to creating sustainable, positive change for those who need it most.
“A real leader is someone who not only has the vision but has also thought through the execution of the vision to ensure that they can communicate it to the stakeholders that are needed,” she says.
Hannah Blume is a contributing writer to Real Leaders.’25
