FOR IMMEDIATE RELEASE:
May 10, 2007

Contact
John Erickson, Chief Financial Officer (301) 951-6122
Tom McHale, Senior Vice President, Finance (301) 951-6122

EUROPEAN CAPITAL COMPLETES INITIAL PUBLIC OFFERING

Bethesda, MD – May 10, 2007 - American Capital Strategies Ltd. (“American Capital”) (Nasdaq:ACAS) announced today that its affiliate European Capital Limited (“European Capital”) has completed an initial public offering of its ordinary shares.  The shares have been admitted to the Official List of the U.K. Financial Services Authority and are traded on the London Stock Exchange's main market for listed securities under the symbol ECAS.

The offering raised gross proceeds of €125,000,000 ($169,800,000) through a sale of 12.7 million ordinary shares at €9.84 ($13.37) per share.  European Capital has also granted an option to purchase up to an additional 1.9 million ordinary shares to the underwriters to cover over-allotments.

This press release is neither an offer to sell nor a solicitation of an offer to buy shares of European Capital.  

ABOUT EUROPEAN CAPITAL

European Capital is a closed-end investment company for pan European equity, mezzanine and senior debt investments. European Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts and provides capital directly to private and public companies headquartered predominantly in Europe. European Capital generally invests between €5 million and €125 million per transaction and can arrange for larger investments. Its website is www.EuropeanCapital.com.

ABOUT AMERICAN CAPITAL

American Capital is the second largest U.S. publicly traded alternative asset manager with approximately $11 billion in assets under management (second to Fortress (NYSE: FIG)).  American Capital, both directly and through its global asset management business, is an investor in management and employee buyouts, private equity buyouts, and early stage and mature private and public companies.  American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations.  American Capital and its affiliates invest from $5 million to $800 million per company in North America and €5 million to €500 million per company in Europe.

As of April 30, 2007, American Capital shareholders have enjoyed a total return of 660% since the Company's IPO - an annualized return of 23%, assuming reinvestment of dividends.  American Capital has paid a total of $1.6 billion in dividends and paid or declared $24.24 dividends per share since going public in August 1997 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 www.AmericanCapital.com or www.EuropeanCapital.com.

The ordinary shares offered by European Capital as described above have not been, and will not be, registered under the US Securities Act of 1933, as amended, or under the US Securities Exchange Act of 1934, as amended, or with any securities regulatory authority of any state or other jurisdiction in the US for offer or sale as part of their distribution and may not be offered or sold in the US except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable state securities laws. There will be no public offering of the securities in the United States.

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.