American Capital Opens Near Boston

American Capital Strategies announced that it is opening an office in Framingham, Mass. It will focus on technology investments, and will be led by existing principal Miles Arone. He will be joined by new hire Patrick Gallagher, who previously was a vice president with Morgan Stanley Venture Partners.

 

PRESS RELEASE

American Capital Strategies Ltd. (Nasdaq: ACAS), a member of the S&P 500, the largest U.S. publicly traded private equity fund and one of the largest publicly traded alternative asset managers, announced today that it is expanding its technology investment activities on the East Coast with the opening of an office in the greater Boston area. The American Capital Technology Group's office is located in Framingham, 20 miles west of Boston and is led by Miles Arnone, Managing Director and five year veteran of American Capital. American Capital also has an office focused on technology investments in Palo Alto, CA.

Joining Mr. Arnone in Boston as Principal of the Technology Group is Patrick Gallagher. Mr. Gallagher brings 14 years of technology investing, operating and finance experience to American Capital.

“Since the launch of the American Capital Technology Group in February 2006, we have been focused on building a team of experienced venture and private equity professionals,” said Virginia M. Turezyn, Managing Director, American Capital Technology Group. “Patrick is a strong addition to our team and with Miles forms the nucleus of senior leadership to further expand our East Coast investment team. Miles has a deep knowledge of the technology industry both through his work on American Capital's Operations Team and the Technology Group and I'm pleased that he will head our team in the Boston office.”

“I am delighted with the opening of the Boston office and the expansion of the Technology Group,” said Mr. Arnone. “Boston is a major technology corridor, fueled by world-renowned universities focused on technology and business and an entrepreneurial culture. The strategic location of the office in the Boston metropolitan area as well as the addition of Patrick will strengthen the group and promote growth by focusing on investment and partnering opportunities in the region's technology sector.”

Mr. Arnone joined American Capital in September 2002 as a Vice President in the Operations Team and was later promoted to Principal. In 2005, he joined the Technology Group as Principal and was promoted to Managing Director in 2007. Mr. Arnone is currently serving on the Board of Directors of the Technology Group's investments in Exstream Software LLC, Zencon Technologies, FreeConference.com, Reef Point Systems, Inc. and Tymphany Corporation.

“In less than two years, the Technology Group has established an outstanding reputation for its industry acumen, one-stop financing capabilities, industry network and flexibility,” said Mr. Gallagher. “I am excited to join the group as it expands investment activities and creates a presence on the East Coast with its new office. I am looking forward to this new opportunity and to working with my new colleagues.”

Mr. Gallagher joins American Capital from Morgan Stanley Venture Partners where he was Vice President and responsible for executing East Coast technology investments. In addition to participating in deal sourcing, due diligence, business and financial modeling, capital structure negotiations, Mr. Gallagher worked closely with senior management teams of portfolio companies, assisting with follow-on investments, mergers, corporate strategy, executive recruitment and liquidity options. He is currently a Board member for Constant Contact (Nasdaq: CTCT), and recently served on the boards of Core Security and Immobilien Scout.

With the addition of Mr. Gallagher, the American Capital Technology Group consists of 10 investment professionals in its two offices in Boston and Palo Alto.

ABOUT THE AMERICAN CAPITAL TECHNOLOGY GROUP

The American Capital Technology Group invests in early, middle and late stage technology companies. With the flexibility to invest in equity and debt from $5 million to $800 million, the American Capital Technology Group can provide its capital base and domain expertise to build category-leading, technology companies.

As of September 30, 2007, American Capital and its affiliate American Capital Equity I LLC had $2.8 billion in technology investments in their portfolio. These companies generally are mature, high performing, cash flowing companies with excellent growth rates. They operate across many industry sectors and are driven by a broad range of technologies. The Technology Group extends American Capital's existing technology investment business by investing in earlier stage technology companies.

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 euro 5 million to euro 500 million per company in Europe.

As of October 31, 2007, American Capital shareholders have enjoyed a total return of 607% since the Company's IPO, an annualized return of 21%, assuming reinvestment of dividends. American Capital has paid a total of $1.9 billion in dividends and paid or declared $26.16 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 .