NEWS

BETHESDA, Md., April 16 /PRNewswire/ -- American Capital Strategies, Ltd. (Nasdaq:ACAS) announced today that for the fifth consecutive year its Employee Ownership Index (EOI) outperformed the majority of stock market averages, including both the Dow Jones Industrial Average (DJIA) and the Standard & Poor's (S&P) 500.

The EOI has performed remarkably well as demonstrated by its 193.21% cumulative stock appreciation since the second quarter of 1992 on an equal weighted basis. The cumulative returns for the DJIA and the S&P 500 were 145.51% and 140.55%, respectively. Equal weighting allows the EOI to show how the average employee-owned public company compares to the entire market. In its comparison to the S&P 500 and DJIA, the EOI has consistently outperformed both indexes from the fourth quarter of 1992 to the present date, with a commendable lead. The EOI's excellent performance in 1997 allowed it to finish the year with a 32.52% price appreciation as compared to 20.32% in 1996. The impressive cumulative performance and overall strength of the EOI illustrates the significance of employee ownership relative to the overall performance of the market.

Continuing with the stellar performance exhibited during the third quarter of 1997, the average employee-owned company outperformed all relevant market indexes for the year. The EOI companies exceeded that of the Russell 2000, the Value-Line (Geometric), the DJIA, the S&P Smallcap 600, the Wilshire 5000, the S&P Midcap 400, and the S&P 500. The performance of these indexes was 20.52%, 21.06%, 22.64%, 24.53%, 29.17%, 30.44%, and 31.01% respectively.

``In the five years of tracking the EOI's performance, the data illustrates a consistent pattern of ESOP companies performing better than most stock market averages,'' said ACS Analyst Lisa Hollod. ``This translates into superior results when investing in publicly-traded stock of companies with significant employee ownership.''

Hollod also noted that in analyzing EOI companies within the major stock exchanges, ESOP companies significantly outperformed their respective stocks by wide margins. The EOI companies on the Nasdaq showed the strongest comparative performance, 34.84%, exceeding the Nasdaq composite by as much as 61 percent.

``The fact that the Index consistently beats the market demonstrates how important employee ownership is within the market. It also provides us with strong evidence that employee ownership is associated with superior financial returns for both investors and employees,'' commented ACS President and CEO Malon Wilkus. ``It is exciting to be able to release such impressive results in that it reflects well on the future of ESOP transactions.''

The Employee Ownership Index (EOI) was developed in 1992 based upon the research of professors Joseph Blasi, Douglas Kruse, and Michael Conte, and tracks the performance of approximately 350 stocks in companies with 10% or more broad-based employee ownership. The EOI is maintained as a proprietary database by American Capital Strategies, an employee buyout and specialty finance company that provides senior debt, subordinated debt and equity to companies in need of capital for employee buyouts, retiring owner ESOP transactions, and ESOP growth, acquisitions, liquidity, and repurchase financing. The results are released quarterly.

EOI Cumulative Price Appreciation (Beginning Q292) EOI (EqWt) DJIA S&P 500 Q492 14.16 2.03 7.93 Q493 38.68 16.03 15.55 Q494 42.64 19.04 13.85 Q495 83.90 58.87 52.68 Q496 83.90 100.18 83.61 Q497 193.21 145.51 140.55

1997 EOI Comparative Performance EOI EqWt: 32.52% Exchanges: Indexes: EOI-NYSE 33.62% DJIA 22.64% NYSE Composite 30.31% Russell 2000 20.52% EOI-NASDAQ 34.84% Wilshire 5000 29.17% EOI-AMEX 30.03% S&P 500 31.01% AMEX Composite 19.62% S&P Midcap 400 30.44% S&P Smallcap 600 24.53% Value-Line 21.06%