UPDATED PRESS RELEASE
FOR IMMEDIATE RELEASE:
February 27, 2008

Contact
Kenneth Jones, Principal, Sponsor Finance Group (610) 238-0210
Brian Maney, Director, Corporate Communications (301) 951-6122

AMERICAN CAPITAL ARRANGES $75 MILLION IN RECAPITALIZATION AND ADD-ON ACQUISITION FINANCING FOR PORTFOLIO COMPANY TANENBAUM-HARBER

Bethesda, MD – February 27, 2008 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that in December 2007 it arranged the $75 million recapitalization of its portfolio company Tanenbaum-Harber Co. Holdings, Inc. (“TH”), an insurance brokerage and risk management consulting firm.  The recapitalization supports the refinancing of a portion of TH’s existing debt as well as TH’s second add-on acquisition.  American Capital’s investment takes the form of a revolving credit facility, term loan and preferred and common equity.  Olympus Partners, the equity sponsor and majority owner of TH, also invested additional equity.

“Our financing for Tanenbaum-Harber continues our support for the company as it creates a leading full service insurance service specialist,” said Brian Graff, Regional Managing Director, American Capital.  “Since our original investment in TH in 2006, the company, with the expertise and capital of Olympus Partners, has successfully executed its planned growth strategy.  We are pleased to again be contributing our financial resources to TH for this acquisition.”

American Capital has invested directly and through its funds under management $10.5 billion in the last twelve months and $900 million quarter to date.  Not including funds under management, American Capital has invested $8.1 million in the last twelve months and $800 million quarter to date. American Capital assisted in the refinance or syndication of approximately $1.9 billion of senior debt for its portfolio companies in the last twelve months and approximately $42.5 million quarter to date.  For more information about American Capital’s portfolio, click here.

Tanenbaum-Harber is a leading New York City based, middle market corporate insurance and surety brokerage firm which provides corporate insurance brokerage, risk management and employee benefits brokerage services.

“American Capital, with its follow-through, commitment, financing flexibility and expertise in assessing add-on prospects, has proved to be an ideal investment partner in growing Tanenbaum-Harber,” said Paul Rubin, Partner, Olympus Partners.  “We are delighted with our choice of American Capital and look forward to continuing to collaborate in creating one of the leading brokerage companies nationwide.”

ABOUT AMERICAN CAPITAL

American Capital is the only alternative asset management company that is a member of the S&P 500.  With $19 billion in capital resources under management, American Capital is the largest U.S. publicly traded private equity fund and one of the largest publicly traded alternative asset managers.  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 December 31, 2007, American Capital shareholders have enjoyed a total return of 453% since the Company's IPO—an annualized return of 18%, assuming reinvestment of dividends.  American Capital has paid a total of $2.1 billion in dividends and paid or declared $27.17 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.

ABOUT OLYMPUS PARTNERS

Olympus Partners is a private equity firm focused on middle market management buyouts and later stage growth capital deals.  Founded in 1988, Olympus manages over $3.0 billion on behalf of corporate pension plans, public retirement systems, university endowment funds and executives of Olympus' portfolio companies.  Olympus invests from $30 million to $200 million or more.  Olympus' experience with financial services portfolio companies include realized investments in: Talbot Holdings, the parent of a specialty insurance group operating within the Lloyd's of London Insurance Market, 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.

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 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.