FOR IMMEDIATE RELEASE:
January 17, 2006

Contact
David Ehrenfest Steinglass, Senior Vice President, Corporate Development (301) 951-6122
Brian Maney, Director, Corporate Communications (301) 951-6122

American Capital Appoints David Ehrenfest Steinglass Senior Vice President for Corporate Development

Bethesda, MD - January 17, 2006 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that David Ehrenfest Steinglass has been appointed to the newly created post of Senior Vice President for Corporate Development, effective January 1, 2006. Mr. Ehrenfest Steinglass has been a Managing Director and co-leader of the Bethesda-based investment team of American Capital since July 2002. In his new role, he will have project management responsibility for the incubation and launch of geographic- and sector-specific funds as part of American Capital's strategy to become a publicly traded manager of funds of private assets. In addition, Mr. Ehrenfest Steinglass will be responsible for identifying and executing other strategic growth initiatives.

"David Steinglass has an excellent track record as one of our Managing Directors and has demonstrated a consistent ability to consummate highly complex transactions. We are excited that he has agreed to deploy those skills in support of the development of our asset management business," said Malon Wilkus, Chairman, President and CEO. "We would hope that our growing and highly predictable asset management income will contribute to diversification and increases in our valuation."

"I am excited to be part of this latest phase of American Capital's growth," said Mr. Ehrenfest Steinglass. "The asset management strategy will enable us to tap new and specialized pools of capital while replicating our investment approach in new assets classes and locations in the global economy."

Mr. Ehrenfest Steinglass joined American Capital in 1997, immediately following its initial public offering. He spent his first three years with the firm in New York City, and then moved to Bethesda, where he built an investment team of 12 professionals managing nearly $750 million in capital. He earned his bachelors degree, magna cum laude, from Harvard College and his law degree, magna cum laude, from New York University Law School.

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 or declared $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.