Pat Dorsey
FOLLOWDorsey Asset Management
The foremost thinker on economic moats, running a concentrated portfolio of high-ROIC compounders with long reinvestment runways -- intellectually the closest match to our framework, despite limited public track record data.
Growth-at-Reasonable-Price
Current Portfolio
2025-Q4 · 10 positions · Filed 2026-02-17
| # | Ticker | Value | Weight |
|---|---|---|---|
| 1 | N07059210 | $205.8M | 17.9%Conviction |
| 2 | DANAHER CORPORATION | $189.4M | 16.5%Conviction |
| 3 | N00985106 | $174.7M | 15.2%Conviction |
| 4 | META | $105.9M | 9.2% |
| 5 | BKNG | $87.4M | 7.6% |
| 6 | RPRX | $87.3M | 7.6% |
| 7 | LYV | $85.9M | 7.5% |
| 8 | AZO | $85.2M | 7.4% |
| 9 | GOOG | $68.1M | 5.9% |
| 10 | ENOV | $60.7M | 5.3% |
Allocation
Recent Changes
2025-Q4 vs 2025-Q3Portfolio +3.4%
| Action | Ticker | Shares Change | Value Change |
|---|---|---|---|
| NEW | LYV | +603K | +$85.9M Est. bought $125.61–$158.88 |
| INCREASED | N07059210 | +19K(+11%) | +$38.1M |
| DECREASED | AZO | -5K(-16%) | $-43.0M |
| DECREASED | GOOG | -212K(-49%) | $-36.5M |
| DECREASED | META | -32K(-17%) | $-35.3M |
| DECREASED | N00985106 | -49K(-4%) | +$21.7M |
| DECREASED | DANAHER CORPORATION | -33K(-4%) | +$18.8M |
| DECREASED | ENOV | -120K(-5%) | $-12.1M |
| DECREASED | RPRX | -91K(-4%) | +$4.4M |
| DECREASED | BKNG | -658(-4%) | $-4.3M |
Score Breakdown
Investment Philosophy & Portfolio Style
Philosophy
Dorsey's philosophy is deeply rooted in three pillars: (1) Economic moats -- he invests only in businesses with durable competitive advantages (switching costs, network effects, intangible assets, cost advantages, efficient scale). This is his primary filter and non-negotiable criterion. (2) Reinvestment runways -- he strongly prefers businesses that can reinvest capital at high incremental rates of return for extended periods. He believes the true compounding power of an investment comes not just from having a moat, but from having a long runway to deploy capital within the moat. This distinguishes him from many moat-focused investors who own mature, slow-growth businesses. Dorsey specifically seeks companies that are both moat-protected AND growing by reinvesting at high returns. (3) Valuation discipline -- he buys when price is below his estimate of intrinsic value, but he is willing to pay a fair price for exceptional businesses rather than demanding deep value discounts. He thinks of himself as a quality compounder investor, not a deep value investor. He has noted that his biggest mistakes at Morningstar were selling great compounders too early because they appeared 'fully valued,' teaching him to hold longer. He also emphasizes capital allocation skill in management -- preferring companies that allocate intelligently rather than empire-building or pursuing low-ROIC acquisitions.
Portfolio Style
Highly concentrated -- Dorsey Asset Management typically holds 15-25 positions, with the top 10 representing an estimated 60-75% of assets. Global mandate -- he invests across US, European, and emerging market equities, wherever he finds the best moat + reinvestment combination. Sectors tend to be tilted toward information services, financial exchanges, software, specialty industrials, and other asset-light businesses with high returns on invested capital. He avoids capital-intensive businesses, commodity producers, and companies without durable competitive advantages. Long-only, no leverage, no shorting. Holding periods are very long -- he seeks to hold compounders for 5-10+ years and has noted that he would ideally never sell a great compounder. Turnover is low. The strategy is run as separately managed accounts, not a mutual fund, which gives him more flexibility and no redemption pressure.
Background
Pat Dorsey is the founder and portfolio manager of Dorsey Asset Management, a registered investment adviser based in Chicago that manages a single concentrated global equity strategy. Before founding Dorsey Asset Management in 2015, he spent 12 years at Morningstar, where he served as Director of Equity Research, overseeing more than 100 equity analysts. At Morningstar, he was the architect of their 'economic moat' rating methodology -- the systematic framework for evaluating competitive advantages that Morningstar uses to rate every stock they cover. He is the author of two widely-read investment books: 'The Five Rules for Successful Stock Investing' (2003) and 'The Little Book That Builds Wealth' (2008), both focused on identifying and profiting from durable competitive advantages. He is one of the foremost thinkers on competitive advantage analysis in the investment world. He holds an MS in Political Science from Northwestern University. Dorsey Asset Management runs a concentrated portfolio of approximately 15-25 positions and is structured as a long-only, separately managed account strategy. AUM is relatively modest (estimated $200-500 million), as Dorsey intentionally keeps the firm small to preserve the ability to invest in smaller-cap opportunities.
Track Record
Dorsey Asset Management has been operating since 2015, giving approximately 10 years of track record. As a private investment adviser (not a mutual fund), detailed performance data is not publicly available. However, based on the quality of his investment framework, his portfolio composition (high-quality compounders), and the strong performance of the types of businesses he favors (moat-rich, high-ROIC compounders have dramatically outperformed the market over this period), informed estimates suggest strong performance. His intellectual track record at Morningstar is impeccable -- the moat methodology he built has been validated extensively, and the wide-moat stocks he championed have outperformed the broad market over virtually every multi-year period. His books remain among the best practical guides to competitive advantage analysis. However, without verified public performance data, we cannot independently confirm his investment returns.
Notable Holdings
Based on 13F filings, Dorsey's portfolio has included positions in companies like MSCI Inc, S&P Global, Verisk Analytics, TransUnion, MarketAxess, Fair Isaac Corporation (FICO), CoStar Group, Roper Technologies, Brookfield Asset Management, Heico Corporation, and various European and global compounders. The portfolio is characterized by high-ROIC, asset-light businesses with strong competitive positions and long reinvestment runways. Many of his holdings are in the financial data/analytics, software, and specialty industrial sectors -- businesses that benefit from network effects, switching costs, or intangible assets. He tends to avoid mega-cap tech in favor of less-followed, high-quality mid-cap compounders.
Transparency & Integrity
Transparency(Score: 6/10)
Moderate transparency. Dorsey Asset Management files 13F reports quarterly, disclosing public equity holdings above the reporting threshold. However, as a private adviser, detailed performance numbers, investor letters, and portfolio analytics are not publicly available. Dorsey himself is moderately visible through podcast interviews, conference presentations, and his books, where he shares his intellectual framework generously. His investment thinking is highly transparent -- anyone who reads his two books and watches his presentations understands exactly how he thinks. But the specific portfolio results and decision-making process are private. Fee structure: typical SMA advisory fee, likely 1-1.5% of AUM, no performance fee.
Integrity(Score: 9/10)
Very high integrity. Dorsey left a high-profile, well-compensated position at Morningstar to start his own firm and put his money where his mouth is -- managing a concentrated portfolio based on the principles he spent a decade writing about and teaching. He has been completely consistent in his investment philosophy across books, interviews, and (from what can be observed) portfolio construction. He intentionally keeps AUM small, forgoing higher fees to preserve investment flexibility -- a strong signal of investor alignment over fee maximization. He has no known ethical issues, regulatory problems, or conflicts of interest. His books are intellectually honest and practical, not self-promotional or misleading. He openly discusses his mistakes and what he learned from them (particularly the Morningstar experience of selling compounders too early).
Relevance to Us
Pat Dorsey is extremely relevant to our approach. His emphasis on economic moats and reinvestment runways directly supports our focus on 'fundamentally great companies with secular tailwinds.' His concentration level (15-25 positions) is very close to our ideal. His long-only, no-leverage structure matches perfectly. His long holding periods (5-10+ years) align with our horizon. His valuation discipline is compatible with our floor price approach, though he focuses more on intrinsic value growth than on absolute downside protection. His global mandate gives us exposure to opportunities we might miss with a US-only lens. His intellectual framework (moats + reinvestment + capital allocation) is perhaps the most directly applicable framework to our investment process. Key gaps relative to our approach: (1) he does not explicitly incorporate AGI or technology disruption into his framework in the way we do -- his moat analysis is grounded in traditional competitive advantage theory; (2) his track record is unverifiable publicly; (3) his AUM is small and his 13F may not capture his full portfolio. His books are essential reading for our investment process, and his portfolio holdings are an excellent source of ideas for high-quality compounders.