FOR IMMEDIATE RELEASE:
November 3, 2005

Contact
David Ehrenfest Steinglass, Managing Director (301) 951-6122
Brian Maney, Director, Corporate Communications (301) 951-6122

LES BROWNLEE, FORMER U.S. ARMY ACTING SECRETARY, TO WORK WITH AMERICAN CAPITAL TO IDENTIFY AND INVEST IN FEDERAL CONTRACTORS

Bethesda, MD - November 3, 2005 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today Les Brownlee, former Acting Secretary of the Army, has become an advisor to American Capital with a mandate to identify investment opportunities in the federal contracting market and to work in support of those investments. Brownlee joins an ongoing effort led by David Ehrenfest Steinglass, Managing Director in the Bethesda, Maryland office of American Capital. Together, Steinglass and Brownlee will build upon American Capital's track record of successful government services investing, which includes investments in Weston Solutions Inc., PaR Systems Inc., Texstars Inc., Compusearch Software Systems Inc., MATCOM International Corporation, Transcore Holdings Inc., Soil Safe Holdings Inc., Schoor DePalma Inc., Global Dosimetry Solutions Inc., T-Netix Inc. and DigitalNet Inc.
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"Les Brownlee has served the United States for four decades," said Steinglass, "And with his extensive military and federal government experience has unparalleled perspectives on those companies that support our National Security. We are confident that those perspectives will add immeasurably to our ability to identify and partner with exceptional companies in that sector. Furthermore, Les's role as a director for these companies post-closing will accelerate the pace of value creation for American Capital's shareholders."

Brownlee retired from government service in December 2004, having served since November 2001 as the 27th Under Secretary of the Army. From May 2003 to November 2004, he served concurrently as the Acting Secretary of the Army for eighteen months. Brownlee previously served on the staff of the Senate Armed Services Committee from 1987 until March 1996, when he was named Staff Director of the Senate Committee on Armed Services by then Chairman Strom Thurmond (R-SC). In January 1999, he was selected to continue as Staff Director for the Committee's current Chairman John Warner (R-VA), where he served until November 2001, when he became the Under Secretary of the Army. Brownlee is a retired Army Colonel. He is a distinguished honor graduate of the U.S. Army Ranger Course, an honor graduate of both the Infantry Officer Advanced Course and the Command and General Staff College, and a graduate of the Army's airborne course as well as the U.S. Army War College. Brownlee served two tours in Vietnam, and his military decorations include the Silver Star with Oak Leaf Cluster, the Bronze Star with two Oak Leaf Clusters, and the Purple Heart.

"We are pleased to welcome Secretary Brownlee to the American Capital team," said Chief Operating Officer Ira Wagner. "Our increased activity in the federal contracting arena, like our other industry verticals, is a product of American Capital's outstanding people, low cost capital, and the ability to execute, including our One-Stop Buyout^TM and one-stop debt financing capability."

The government services initiative is one of several being pursued by the Bethesda deal team - others include all elements of business process outsourcing (BPO) including, but not limited to, logistics and transportation, transaction processing, marketing services, education and training, installed base software and IT services. Other areas of interest include consumer products, environmental and engineering services, financial services, health care services and medical devices.

For more information about American Capital's government services initiatives, please contact David Ehrenfest Steinglass at 301-951-6122.

ABOUT AMERICAN CAPITAL

American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $6.7 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. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalizations.

As of October 31, 2005, American Capital shareholders have enjoyed a total return of 419% since the Company's IPO - an annualized return of 22%, assuming reinvestment of dividends. American Capital has paid a total of $868 million in dividends and paid or declared $19.08 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.

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.