Activist hedge fund Engine Capital has disclosed a roughly 3% stake in Acadia Healthcare, one of the largest US providers of mental health services, calling for a board refresh and a strategic review of the company’s assets, according to a report by the Financial Times.

The move places Engine among Acadia’s top 10 investors.

In a letter to the board, seen by the Financial Times, Engine criticised Acadia’s “growth at any cost” strategy, describing its management structure as bloated following a 2022 reorganisation. The hedge fund urged the company to add directors with behavioural health and capital allocation expertise, pause capital-intensive facility projects, and consider asset sales to unlock cash for share buybacks.

Acadia, which operates more than 250 facilities including psychiatric hospitals and opioid recovery clinics, has faced federal probes by the US Department of Justice and the Securities and Exchange Commission over alleged patient mistreatment and falsified insurance claims. Legal costs reached $84.5 million in the first half of 2025. Shares in the Tennessee-based company are down 71% over the past year, giving it an equity value of just over $2bn.

CEO Chris Hunter said the company remains committed to a thorough review of operations while cooperating with regulators. Engine Capital, founded in 2013 by Arnaud Ajdler, has a track record of activist campaigns, including recent interventions at Smiths Group and Lyft.