Dev Kantesaria: the Moat Investor
An analysis of the investment strategy of Dev Kantesaria and his current portfolio.
Introduction
Dev Kantesaria is a highly regarded investor known for his disciplined, long-term approach to the selection of businesses. As the Founder and Portfolio Manager of Valley Forge Capital Management (VFCM), Kantesaria has built a reputation for identifying high-quality businesses and holding them for extended periods—sometimes waiting years before making an initial investment. Since 2007, VFCM is estimated to have returned 15% CAGR (S&P 500: 10% CAGR).
Kantesaria’s strategy is deeply rooted in thorough research, patience, and a focus on companies with durable competitive advantages—moats.
Background and Career
Kantesaria’s background is unique compared to many other prominent investors. He began his adult life studying at Massachusetts Institute of Technology, where he obtained his Bachelor of Science degree, followed by a Doctor of Medicine degree from Harvard Medical School. Before starting VFCM, he worked at McKinsey, TL Ventures and Devon Park Bioventures (source: LinkedIn).
Investment Philosophy
Kantesaria’s approach is heavily influenced by fundamental analysis and a deep understanding of business models. Some key aspects of his investment philosophy are outlined below.
Long-Term Thinking and Patience
Unlike many investors who focus on short-term market movements, Kantesaria is known for waiting years before making an initial investment. He spends extensive time researching and monitoring companies, ensuring he fully understands their business models, competitive positioning, and future growth potential before committing capital.
At Valley Forge Capital Management, we believe that having the proper temperament and discipline is key to superior investment returns. Practicing patience and remaining unemotional through market swings allows VFCM to take advantage of opportunities when we see others behaving irrationally or fearfully. — Dev Kantesaria
Focus on Competitive Moats
Inspired by legendary investors like Warren Buffett and Charlie Munger, Kantesaria prioritizes companies with strong and durable competitive advantages—moats. These moats can take various forms, such as brand strength, network effects, economies of scale, or technological superiority. His strategy revolves around identifying businesses that can sustain their profitability and fend off competition over the long run.
VFCM seeks to buy companies that are “compounding machines,” which can grow their intrinsic values over a multi-year period. — Valley Forge Capital Management
High-Conviction, Concentrated Investing
Rather than diversifying across a vast number of stocks, Kantesaria employs a concentrated portfolio strategy, meaning he invests in a select number of high-quality companies. This approach allows him to deeply understand each investment and capitalize on opportunities when given, where the upside potential significantly outweighs the downside risk, driven by a strong moat that is expanding in strength.
VFCM runs a long-biased equity strategy, which employs a rigorous, bottom-up fundamental approach to find high-quality businesses with strong organic growth, predictable earnings, capital efficiency, and prudent management. — Valley Forge Capital Management
Avoiding Market Noise and Speculation
Kantesaria's approach is rooted in fundamental research rather than reacting to market speculation or short-term macroeconomic trends. He avoids investments driven by hypes or narratives; putting the emphasis on companies with strong financials, predictable revenue streams, and a clear path to sustained growth.
VFCM looks to purchase companies with leading industry positions that can thrive in a variety of economic conditions. This approach reduces the need to market-time around macroeconomic factors, which are difficult to predict in the short term. — Valley Forge Capital Management
A Deep Research Process
One of the most defining aspects of Kantesaria’s strategy is his rigorous research process. He often tracks companies for years before investing, taking the time to understand their industry, leadership, and financial trajectory. This patient and data-driven decision-making allows him to make high-conviction bets with confidence.
VFCM analyzes companies over a multi-year timeframe and looks beyond current earnings to focus on the long-term health of businesses. — Valley Forge Capital Management
Current Portfolio VFCM (December 31, 2024)
Fair Isaac (FICO 0.00%↑) Kantesaria’s largest position with 34.39%, is a market leader in credit scoring and analytics. FICO provides financial institutions with tools to assess credit risk and make data-driven lending decisions.
S&P Global (SPGI 0.00%↑) like Moody’s (MCO 0.00%↑) are a financial intelligence firm offering credit ratings (i.e., the “toll booths for debt”), market analytics, supporting global investment decisions. S&P Global makes up 19.25% of VFCM’s portfolio, and Moody’s 13.70%.
Mastercard (MA 0.00%↑) and Visa (V 0.00%↑) are global payments technology companies (i.e., “the toll booths for payments”) facilitating secure electronic transactions, connecting consumers, merchants, and financial institutions worldwide. Mastercard is good for 17.22% of the total portfolio, while Visa contributes 6.35% to the total.
Intuit (INTU 0.00%↑) is a financial software company behind QuickBooks, TurboTax, and Mint, helping individuals and businesses manage accounting, taxes, and personal finance.
ASML (ASML 0.00%↑), also in my own portfolio [Portfolio Update March 1, 2025], is a key supplier of semiconductor manufacturing equipment, specializing in cutting-edge lithography systems essential for producing advanced microchips, like its EUV systems (with which it has a 100% monopoly).
New in Kantesaria’s portfolio in 24Q4 are Equifax and MSCI. Equifax (EFX 0.00%↑) is a major credit bureau providing consumer credit reports, fraud detection, and data analytics services to businesses and financial institutions, where MSCI (MSCI 0.00%↑) is a leading provider of investment decision tools, offering indices (e.g., the MSCI World Index), analytics, and ESG research to institutional investors worldwide.
Lessons from Dev Kantesaria’s Investment Approach
For investors looking to apply Kantesaria’s principles, here are some key takeaways:
Patience is key. Great investments require time to research and even longer to compound. These investment approach requires a long-term thinking mindset.
Quality over quantity. A few outstanding companies are better than a large number of average ones. This dynamic gives a different view on how most people perceive risks (i.e., moats > diversification).
Understand the business deeply. Invest in companies whose business models, risks, and competitive positioning you fully grasp.
Ignore market noise. Short-term volatility should not dictate investment decisions; focus on the development of the companies’ intrinsic value.
Think long-term. Wealth creation through investing is a marathon, not a sprint.
Conclusion
Dev Kantesaria has carved a unique path in the investing world, transitioning from medicine to finance and building a successful career based on rigorous research, patience, and high-conviction investing. His strategy of waiting for the right opportunity and focusing on companies with durable moats has made him a respected figure in the value investing community.
For investors seeking to build long-term, sustainable wealth, Kantesaria’s philosophy serves as an excellent inspiration. His disciplined approach highlights the importance of deep research, long-term conviction, and resisting short-term market distractions—principles that remain timeless, yet crucial, in a world of investing with ever-evolving hypes and narratives.
Learn more about Dev Kantesaria
Below are a series of insightful podcasts featuring Dev Kantesaria, where he shares his perspective on investing.
Disclaimer: The information above is provided for general informational purposes only and should not be construed as investment, accounting and/or financial advice. You should consult directly with a professional if financial, accounting, tax or other expertise is required.
Thanks for the post. His philosophy can be summed up as invest in companies with longevity and predictability. And you need deep understanding of business models to do that.
Big fan of Dev’s investment thesis!