FOR IMMEDIATE RELEASE:
May 1, 2006

Contact
Robert K. Grunewald, Managing Director, Financial Services Group (301) 951-6122
Brian Maney, Director, Corporate Communications (301) 951-6122

American Capital Launches Financial Services Group

Bethesda, MD - May 1, 2006 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that Bob Grunewald has joined the Company as Managing Director of the newly formed American Capital Financial Services Group. Mr. Grunewald was a Managing Director at Wachovia Securities until March 2006, where he founded and led the Specialty Finance Investment Banking practice. Mr. Grunewald will be responsible for developing a team to expand American Capital's investment activities in the financial services sector.

The American Capital Financial Services Group will target investments in middle market companies involved in consumer and commercial finance, insurance and asset management and companies providing products or services to these companies. This sector currently comprises over 20% of U.S. GDP.

"We are very pleased to welcome Bob Grunewald, a seasoned professional in the financial services industry who will head our new Financial Services Group," said Chairman, President and CEO Malon Wilkus. "American Capital has invested approximately $307 million in six companies operating in the financial services industry and we are confident that Bob's experience will enable us to expand further in this area. Establishing the Financial Services Group is part of our strategy to become the only U.S. publicly traded manager of funds of private assets. After developing a substantial deal stream and additional assets in the financial services sector, we would hope to raise a financial services fund that American Capital would manage. Our first managed fund, European Capital, established in 2005 and now with $1.3 billion in capital resources, is performing ahead of plan."

Mr. Grunewald has over 15 years of experience in the financial services industry, completing numerous mergers and acquisitions, public and private equity raises and structured financings. Mr. Grunewald's financing, structuring and advisory experience encompasses the commercial and consumer finance industries as well as the insurance and asset management sectors. Mr. Grunewald holds a master of business administration degree from Georgia State University and a bachelor of business administration degree from the University of Notre Dame.

"I am excited to join American Capital, the most active subordinated debt and equity investor in the middle market, as we expand the business into the financial services area," said Mr. Grunewald. "The financial services industry presents significant opportunities for American Capital and I'm delighted to be an integral part of this growth. With American Capital's ability to provide one-stop financing by funding senior debt, subordinated debt and equity, and our low cost of capital, extensive origination system, efficient in house due diligence and Operations Team, the Financial Services Group will be in a strong position to pursue investment opportunities."

ABOUT AMERICAN CAPITAL
American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $7 billion. American Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts, provides capital directly to private and small public companies and through its asset management business is a manager of debt and equity investments in private companies and commercial loan obligations. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations.

As of December 31, 2005, American Capital shareholders have enjoyed a total return of 412% since the Company's IPO - an annualized return of 22%, assuming reinvestment of dividends. American Capital has paid a total of $868 million in dividends and paid$19.11 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.