Khrom Investments Fund, LP on Acadia Healthcare

Khrom's thesis rests on the gap between Acadia's depressed near-term earnings and what it sees as substantially greater long-term earnings power. Acadia operates in behavioral healthcare, where demand is structurally rising and psychiatric capacity remains constrained, but liability costs, softer volumes, reimbursement and staffing pressure, and a New York Medicaid change reduced expected EBITDA materially. Khrom believes most of those pressures are transitory and estimates that roughly 2,200 net new beds added since 2023 can contribute more than $150 million of incremental EBITDA as they mature. The roll-off of roughly $60 million of start-up losses could further support a path toward approximately $800 million of EBITDA over time. Khrom has also pushed for governance, leadership, capital-allocation and strategic changes after becoming one of the company's largest shareholders, and several of those changes have since occurred.