FOR IMMEDIATE RELEASE:
July 7, 2005

Contact
Ian Larkin, Managing Director (312) 681-7400
Greg Long, Vice President (312) 681-7400
Brian Maney, Director, Corporate Communications (301) 951-6122

AMERICAN CAPITAL INVESTS $17 MILLION IN WORLD'S LARGEST ASSOCIATION MANAGEMENT AND PROFESSIONAL SERVICES COMPANY

Bethesda, MD - July 7, 2005 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today it has invested $17 million in SmithBucklin Corporation, the world's largest association management and professional services company. American Capital's investment takes the form of a senior term B loan and senior subordinated debt and supports the SmithBucklin Employee Stock Ownership Plan's ("ESOP") purchase of the business from the financial investors who had the majority interest in the Company. In addition, SmithBucklin secured a revolving credit facility and a senior term A loan from LaSalle Bank and other financing to complete the transaction. As a result of this transaction, SmithBucklin employees own 100% of SmithBucklin's common stock through the ESOP.

"American Capital is pleased to invest in SmithBucklin's employee buyout and to use our ESOP expertise in the transaction," said American Capital COO Ira Wagner. "We're excited about the opportunity to partner with SmithBucklin's dedicated employees and experienced management team, who will now share in the success of the Company they have helped develop into an undisputed market leader."

American Capital has invested over $2.5 billion in the last twelve months and over $1.3 billion year to date. For more information about American Capital's portfolio click here.

"SmithBucklin is an excellent investment opportunity for American Capital because of its strong management team, talented workforce and unwavering commitment to creating value for its client organizations," said American Capital Managing Director Ian Larkin. "With 56 years of operating history, strong brand recognition and a distinguished track record of success, SmithBucklin offers the most complete range of professional services, human and technical resources and industry knowledge in the association management business. The Company offers its diversified client base a compelling value proposition of superior customer service, client responsiveness and cost-effective management. SmithBucklin's large staff of professionals are deeply integrated with their clients and their commitment to service is underscored by the Company's strong retention rate for both its full-service and project-specific clients."

"Relative to its competitors, SmithBucklin's large size gives it several advantages of scale including: developing and delivering new services and products; acquiring and transitioning new client organizations; deploying new technology; attracting, rewarding and retaining its workforce; leveraging employee knowledge and expertise; and purchasing power," said American Capital Vice President Greg Long. "SmithBucklin's size, reputation and position will enable it to further penetrate the large, addressable market of associations seeking to best leverage their assets to drive growth and build sustained competitiveness."

Founded in 1949, SmithBucklin Corporation is the world's largest association management and professional services company. The Company provides full-service management and function and project-specific services to more than 185 trade associations, professional societies, technology user groups and government institutes and agencies. For its full-service clients, SmithBucklin provides staff resources specializing in all phases of association activity, reports directly to the association's Board of Directors and is responsible for all association operations. Client organizations include the Pet Food Institute, Society of Gynecologic Oncologists, America's SAP Users Group, National Association of Orthopaedic Nurses, Society for Information Management, Regional Airline Association and International Car Wash Association. The Company has three operating facilities in Chicago, Washington, DC and St. Louis and employs over 580 professionals.

"American Capital's familiarity with our business and management team, as well as their ability to offer us flexible, attractive debt financing options made them an excellent financial partner for our ESOP transaction," said SmithBucklin President and CEO Henry S. Givray. "It's the talent, commitment and passion of our people for our clients and for our company that drive SmithBucklin's success and growth. Our management team strongly feels that our people should control the destiny of SmithBucklin and as importantly, have the opportunity to experience the fulfillment of ownership."

For more information about SmithBucklin's history of market leading, specialized association management and professional services click here.

ABOUT AMERICAN CAPITAL

American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $5.4 billion. American Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts, and provides capital directly to private and small public companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalizations.

As of June 30, 2005, American Capital shareholders have enjoyed a total return of 388% since the Company's IPO - an annualized return of 22%, assuming reinvestment of dividends. American Capital has paid a total of $782 million in dividends and paid $17.51 dividends per share since its August 1997 IPO at $15 per share.

Companies interested in learning more about American Capital's flexible financing should contact Mark Opel, Senior Vice President, Business Development, at (800) 248-9340, or visit our website.

Performance data quoted above represents past performance of American Capital. Past performance does not guarantee future results and the investment return and principal value of an investment in American Capital will likely fluctuate. Consequently, an investor's shares, when sold, may be worth more or less than their original cost. Additionally, American Capital's current performance may be lower or higher than the performance data quoted above.

This press release contains forward-looking statements. The statements regarding expected results of American Capital Strategies are subject to various factors and uncertainties, including the uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions, or changes in the conditions of the industries in which American Capital has made investments.

This announcement is neither an offer to sell nor a solicitation to buy securities.
This announcement appears as a matter of record only.