NEWS

Ian Larkin, Principal (312) 681-7400
Brian Maney, Director, Corporate Communications (301) 951-6122

Bethesda, MD - July 9, 2004 - American Capital Strategies Ltd. (Nasdaq:ACAS)announced it has invested $26 million in RPSI Inc., doing business as Retriever Payment Systems, a leading provider of electronic payment processing services and other related services to small and medium-sized merchants. American Capital's investment takes the form of senior subordinated debt and supports GTCR Golder Rauner LLC's recapitalization of Retriever. Merrill Lynch Capital is providing a revolving credit facility and senior term loans. Retriever management is also invested in the transaction.

"We are pleased to be working again with GTCR, building on our relationship and assisting them as they acquire another exceptional company," said American Capital COO Ira Wagner. "Backed by a strong equity sponsor with significant expertise in the payment processing sector and an experienced, industry-leading management team, Retriever is in an excellent position to excel in the attractive electronic transaction processing industry as credit card and debit card payments continue to rise."

American Capital has invested over $1.3 billion in the last twelve months and over $600 million year to date. For more information about American Capital's portfolio click here.

"American Capital is supporting a highly regarded management team that has organically grown Retriever, achieving exceptional operational and financial performance," said American Capital Principal Ian Larkin. "By providing sales groups with sophisticated technological tools to maintain and grow merchant relationships, Retriever has become a merchant acquirer of choice and developed one of the largest distribution channels in the industry. With a highly diversified merchant portfolio, superior quality products and services and a scalable business model, Retriever can expect to thrive in its marketplace as widespread adoption of card-based payment continues to drive growth in the electronic transaction processing industry."

Founded in 1986 and located in Houston, TX, Retriever is one of the fastest growing U.S. merchant acquirers and transaction processors, providing payment processing and other related services to small- and medium-sized merchants for credit card, debit card and other payment transactions. Retriever markets and sells its products and services through a large distribution channel of over 460 independent sales groups located throughout the U.S. that are responsible for identifying, selling and setting up new merchants, and over 250 agent banks that offer Retriever's card processing services to commercial customers. Retriever focuses on providing its distribution partners with unparalleled focus and support through industry-leading service and technologies. During the twelve months ended June 30, 2004, Retriever processed approximately $8.1 billion in transaction volume and ended the period with over 95,000 merchant accounts.

"We're pleased to be partnering again with American Capital," said GTCR Senior Principal Collin Roche. "We are familiar with their hard work and investment capabilities and were confident in their ability to provide the necessary financing to bring this transaction to a quick close."

For more information about Retriever's industry leading transaction processing services click here.

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 over $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.

Companies interested in learning more about American Capital's flexible financing should contact Mark Opel, Principal and Senior Vice President, Business Development, at (800) 248-9340, or visit our website.

Founded in 1980, GTCR Golder Rauner, LLC is a leading private equity investment firm and long-term strategic partner for outstanding management teams. The Chicago-based firm pioneered the investment strategy of identifying and partnering with exceptional executives to build leading companies through a combination of acquisitions and strong internal growth. GTCR currently manages more than $6 billion of equity capital invested in a wide range of companies and industries. Portfolio companies include Transaction Network Services, Inc., a leading provider of data communications services to the credit card and ATM transaction processing industry; Cardinal Logistics Management, Inc., a provider of knowledge-based, integrated logistics solutions; Alliant Resources Group, a leading U.S. distributor of insurance and financial services; and VeriFone, Inc., the leading provider of secure electronic payment solutions for financial institutions, merchants and consumers.

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 or national 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.