FOR IMMEDIATE RELEASE:
May 19, 2006

Contact
Sean Eagle, Principal (301) 951-6122
Brian Maney, Director, Corporate Communications (301) 951-6122

American Capital Invests $35 Million in Recapitalization of Tanenbaum-Harber and Thesco Benefits

Bethesda, MD - May 19, 2006 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today it has invested $35 million in a holding company established for the recapitalization of Tanenbaum-Harber Co. Inc., an insurance brokerage and risk management consulting firm, and Thesco Benefits LLC, an employee benefits brokerage specialist. American Capital's investment takes the form of a senior term loan, senior subordinated debt and redeemable preferred and common equity. American Capital is also providing a revolving credit facility. Olympus Partners is the equity sponsor and the majority owner of the Company. The management teams of the combined company are also investing in the equity of the combined entity.

"We are pleased to work with Olympus for the first time, providing them with a one-stop debt solution for their acquisition and combination of Tanenbaum-Harber and Thesco Benefits," said American Capital Regional Managing Director Brian Graff. "Olympus is a strong sponsor with significant experience in the financial services industry as well as an extensive track record in executing buy-and-build strategies. We are confident in their planned acquisition and integration strategy. In addition, we're delighted to support the committed management teams of Tanenbaum-Harber and Thesco Benefits."

American Capital has invested approximately $3.8 billion in the last twelve months, approximately $1.4 billion year to date and $581 million quarter to date. These amounts do not include American Capital's unfunded equity commitment and debt funded to its portfolio company European Capital. For more information about American Capital's portfolio click here.

"Tanenbaum-Harber and Thesco Benefits excel in negotiating and placing insurance policies for their clients while maintaining a high standard of customer service. Both companies have experienced strong growth, a stable customer base and favorable cash flow characteristics, which provide a solid foundation to build a larger and stronger insurance platform," said American Capital Principal Sean Eagle. "We expect the consolidation of Tanenbaum-Harber and Thesco Benefits to result in cross-selling opportunities and customer and business diversification. In addition, favorable dynamics in the insurance brokerage industry should create attractive acquisition opportunities."

Founded in 1860, Tanenbaum-Harber is an intermediary that places and negotiates insurance contracts for both commercial and personal clients. The Company offers a wide spectrum of insurance policies, including property & casualty, workers compensation, construction-related, environmental and life. Headquartered in New York, NY, the Company is one of the largest regional insurance brokerage and risk management services firms within the greater New York, New Jersey and Connecticut tri-state area.

Thesco Benefits, also headquartered in New York, NY, is one of the leading employee benefits brokerage specialists in the tri-state area. The Company assists clients in the design and purchase of a variety of different benefits, including group medical, dental, vision and life insurance, accidental death and dismemberment insurance, disability insurance and long term care coverage.

Collectively, Tanenbaum-Harber and Thesco Benefits operate four offices in the New York area with over 140 employees.

"We are delighted to partner with American Capital and the management teams of Tanenbaum-Harber and Thesco Benefits. We are confident that the combined capital resources of Olympus and American Capital, coupled with this outstanding management team, will create one of the most exciting platforms for growth in the insurance brokerage industry," said Olympus Partners Partner Jim Quinn. "American Capital's flexible financing structure will allow us to efficiently pursue growth through acquisitions as well as organically."

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 405% since the Company's IPO - an annualized return of 21%, assuming reinvestment of dividends. American Capital has paid a total of $868 million in dividends and paid$20.73 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.

ABOUT OLYMPUS PARTNERS
Olympus Partners is a private equity firm focused on middle market management buyouts and later stage growth capital deals.  Founded in 1989, Olympus manages over $1.7 billion on behalf of corporate pension plans, public retirement systems, university endowment funds and executives of Olympus' portfolio companies.  Olympus invests from $20 million to $150 million or more.  Olympus' experience with financial services portfolio companies include realized investments in: Aspen Re (NYSE: AHL), a leading, worldwide property and casualty reinsurance underwriter and Tempest Re, a worldwide underwriter of property catastrophe reinsurance.  Current portfolio companies include: Ariel Re, a Class 4 Bermuda property and casualty reinsurance company and Talbot Holdings, the parent of a specialty insurance group operating within the Lloyd's of London Insurance Market. 

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.