Investor Relations

Bethesda, MD - July 14, 2004 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that it has closed on its previously announced common stock offering and the underwriters exercised in part their over-allotment option. As a result, American Capital sold in the offering a total of 4,425,000 shares of its common stock at $28.00 per share. The total gross proceeds from the offering, including the over-allotment, were approximately $123.9 million.

A.G. Edwards & Sons, Inc., BB&T Capital Markets, a division of Scott & Stringfellow, Inc., Legg Mason Wood Walker, Incorporated, Piper Jaffray & Co., and RBC Capital Markets were the underwriters. A.G. Edwards & Sons, Inc. acted as book-running manager of the offering.

As of June 30, 2004, American Capital shareholders have enjoyed a total return of 242% since the Company's IPO - an annualized return of 20%, assuming reinvestment of dividends. American Capital has declared a total of $14.52 per share in dividends since its August 1997 IPO.

American Capital is a publicly traded buyout and mezzanine fund with capital resources exceeding $3 billion. American Capital is an investor in and sponsor of management and employee buyouts, invests in private equity sponsored buyouts and provides capital directly to private and small public companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalizations.

All shares of common stock were offered under American Capital's existing shelf registration statement filed with the Securities and Exchange Commission. This press release is neither an offer to sell nor a solicitation of an offer to buy shares of common stock. The offering of these securities will be made only by means of a prospectus. Copies of the prospectus may be obtained from A.G. Edwards & Sons, Inc., One North Jefferson, St. Louis, Missouri 63103 (telephone number: 314-955-3000). This press release contains forward-looking statements. The statements regarding expected results or performance 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 and international economic conditions, and changes in the conditions of the industries in which American Capital has made investments.

Contact:
John Erickson, CFO (301) 951-6122

SOURCE: American Capital Ltd.