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Maximizing the Public’s Return: Applying Investment Best Practices to Federal Working Capital Funds

Case Study

Maximizing the Public’s Return: Applying Investment Best Practices to Federal Working Capital Funds

Censeo designed a best-in-breed governance and operations model for the management of a multi-million dollar federal investment fund with revolving and working capital focused qualities.


The client, a federal agency, was charged with the operation of a full-recovery investment fund (i.e., a revolving fund that seeks eventual reimbursement of outlays; eligible fund recipients could borrow from the fund but would ultimately need to pay it back). The goal of the fund was to provide financing for large, long-term, multi-year capital projects. It was a popular option for eligible fund recipients, as it provided them with the authority to use these funds without regard to fiscal-year limitations (similar in nature to the value of working capital funds). Critical to the fund’s success was the client’s ability to: independently review and prioritize proposals, ensure that borrowers would fully repay the fund, and support borrowers with the successful implementation of their investment plans.


Given the size and complexity of the fund, the client sought to incorporate commercial best practices in the fund’s operations. Specifically, Censeo was brought on to research strategies around governance structures and operating processes used by other, comparable investment funds. Through scholarly sources and in-depth interviews with practitioners, the team benchmarked investment fund management across a variety of sectors and types of funds. Sectors included other government entities (federal and state revolving funds), commercial entities (corporate venture capital funds and technical experts), as well as nonprofit entities (impact investment funds and grant making organizations).


Censeo developed a best-of-breed fund governance and operating model—appropriately adapting industry best practices for federal application. The team developed a concept of operations, which incorporated governance and operational best practices including:  alignment of fund activities with strategic goals, optimization of all mapped out process steps, and enablement of continuous performance monitoring. The client was also provided a broad inventory of fund management best practices gathered from industry tailored to the client’s unique environment and specific needs (e.g., efficiently screening a multitude of funding proposals, mitigating against conflicts of interest, and managing the fund under lean principles).  The client could also use insights provided as a reference for existing or soon-to-be established funds.