FOR IMMEDIATE RELEASE:
May 4, 2007

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN THE UNITED STATES, CANADA, JAPAN, AUSTRALIA OR THE REPUBLIC OF SOUTH AFRICA OR IN OR INTO ANY OTHER JURISDICTION WHERE SUCH PUBLICATION, DISTRIBUTION OR RELEASE WOULD BREACH ANY APPLICABLE SECURITIES LAW OR REGULATION.

This announcement is an advertisement and not a prospectus and investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of information in the prospectus expected to be published by European Capital Limited today in connection with the admission of the ordinary shares in the capital of the Company to the Official List of the Financial Services Authority and to trading on London Stock Exchange plc's main market for listed securities (the "Prospectus"). Copies of the Prospectus will, following publication, be available from European Capital Limited's registered office.

EUROPEAN CAPITAL LIMITED ("EUROPEAN CAPITAL" OR THE "COMPANY")
ANNOUNCEMENT OF OFFER PRICE OF €9.84 PER ORDINARY SHARE

4 May, 2007 – European Capital Limited ("European Capital"), a closed-ended investment company incorporated in Guernsey, announces its intention to proceed with an initial public offering of ordinary shares to certain institutional and other investors (the "Offer"). European Capital intends to seek a secondary listing under Chapter 14 of the Listing Rules of the UK Listing Authority (the "Listing").

Introduction

European Capital Limited, a closed-ended investment company incorporated in Guernsey in August 2005 for pan-European equity, mezzanine and senior debt investment, today announces the successful pricing of its initial public offering (the "Offer") to institutional and other investors in the UK and elsewhere of new ordinary shares of no par value each ("Ordinary Shares"). The offer price has been set at €9.84 per Ordinary Share (the "Offer Price") implying a market capitalisation of approximately €1.05 billion immediately following the Offer. European Capital will have a secondary listing under Chapter 14 of the Listing Rules of the UK Listing Authority.

• The Offer comprises approximately 12.7 million new Ordinary Shares, representing approximately 12% of the approximate 106.4 million Ordinary Shares in issue following completion of the Offer excluding any exercise of the over-allotment arrangement, described below. The total gross proceeds of the Offer to be received by European Capital from the issue of the new Ordinary Shares are expected to be approximately €125 million.
• The Ordinary Shares in the Offer have been placed with a broad base of institutional and other investors following a roadshow across the UK, Continental Europe, the United States and Canada.
• As will be outlined further in the Prospectus, Citigroup Global Markets Limited ("Citi") has been granted an over-allotment option allowing it to purchase or procure purchasers for additional Ordinary Shares representing up to a maximum of 15 per cent. of the Ordinary Shares in the Offer (the "Over-allotment Option"), which may result in the Company issuing up to approximately 1.9 million additional Ordinary Shares at the Offer Price.
• Conditional dealings will commence on the London Stock Exchange at 8:00 am (London time) today under the ticker "ECAS".
• It is expected that admission of the Ordinary Shares, issued and to be issued, to the Official List of the Financial Services Authority and to trading on the London Stock Exchange's main market for listed securities ("Listing") will become effective, and unconditional dealings will commence, at 8:00 am (London time) on 10 May 2007.

European Capital is managed by European Capital Financial Services (Guernsey) Limited (the "Investment Manager"), a wholly-owned subsidiary of American Capital Strategies, Ltd. ("American Capital"). American Capital is a leading US based investor in equity, mezzanine and senior debt securities and is also the majority owner of European Capital.

Any allocations under the Offer will be conditional on Listing. All dealings on the London Stock Exchange between commencement of conditional dealings and the commencement of unconditional dealings will be on a "when issued" basis. If the Offer does not become unconditional, all such dealings will be of no effect and any such dealings will be at the sole risk of the parties concerned.

Citi, JPMorgan Cazenove Limited ("JPMorgan Cazenove") and Merrill Lynch International ("Merrill Lynch") are acting as joint global co-ordinators and joint bookrunners in relation to the Offer.

Enquiries to:

European Capital Limited
+1 (301) 951-6122
John Erickson, CFO American Capital
Tom McHale, SVP Finance American Capital

NOTES TO EDITORS

Introduction

European Capital is a closed-ended investment company incorporated in Guernsey in August 2005 for pan-European equity, mezzanine and senior debt investment. It is managed by the Investment Manager, a wholly-owned subsidiary of American Capital. American Capital is a leading US based investor in equity, mezzanine and senior debt securities and is also the majority owner of European Capital.

The investment objective of European Capital is to provide investors with dividend income and the potential for share value appreciation by investing in debt and equity investments in private and public companies headquartered predominantly in Europe.

European Capital seeks to achieve its investment objective through pursuing the following types of investments:

(i) European Capital Sponsored Buyouts—providing debt and equity financing as the lead investor in the buyout of private and public companies

(ii) Mezzanine Direct with Sponsors—providing debt and equity financing for buyouts sponsored by private equity firms where the European Capital Group is either the sole or lead mezzanine debt investor;

(iii) Syndicated Mezzanine and Senior Debt—providing mezzanine and senior financing for buyouts sponsored by private equity firms where the European Capital Group is neither the sole nor lead mezzanine or senior debt investor; and

(iv) Direct Investments—providing debt and equity financing directly to private and public companies, which is used for growth, acquisitions or recapitalisations, and investing in structured finance vehicles.

As at 4 May 2007 the European Capital Group has invested an aggregate of €1.7 billion in 50 companies since its establishment in August 2005, of which €1.2 billion was invested in 30 companies during 2006. Since its establishment, European Capital has received €288 million from refinancing and syndication of senior investments and €203 million from repayments and exits. The value of European Capital's investments in portfolio companies as at 4 May 2007 is €1.25 billion. As at 31 December 2006, European Capital's net asset value per preferred share of no par value in the capital of the Company (each a "Preferred Share") was €9.92 and, as at 4 May 2007, European Capital had paid dividends of €37.5 million.

Investment highlights

• Europe is the second largest private equity market and the largest mezzanine finance market in the world by amount invested. European Capital and the Investment Manager consider, as a result of a number of factors, that the European mezzanine market represents a prime opportunity for new entrants and that the European buyout market also represents a meaningful opportunity.
• European Capital expects to benefit from the European presence of the Investment Manager and European Capital Financial Services ("ECFS"), a subsidiary of the Investment Manager. This includes investment teams in London, Paris and Frankfurt with extensive experience in European mezzanine and buyout markets. ECFS expects that over time it will open additional offices in other major European financial centres and also intends to expand its existing investment teams.
• European Capital's institutional approach, based on the American Capital model, provides it with certain competitive advantages. European Capital is able to invest across a portfolio company's entire capital structure, to provide portfolio companies with long-term financing through its permanent capital base and to respond quickly to potential investments due to its access to European staff and infrastructure. For One-Stop Buyouts™, European Capital provides equity, senior debt and mezzanine debt. For One-Stop Financings, European Capital provides all of the senior debt, mezzanine debt and equity co-invest to support an equity sponsor. Also, European Capital can fund itself efficiently through both debt and equity capital resulting in a lower blended cost of capital than traditional private equity firms.

American Capital overview

American Capital was founded in 1986 and is a NASDAQ-listed alternative investment asset management company which directly and through managed funds provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalisations. It had approximately $10.9 billion of assets and capital commitments under management as at 31 December 2006.

The Chairman of European Capital is the founder of American Capital and has been its director, Chief Executive Officer and President since American Capital's inception in 1986, and has been its Chairman other than from August 1997 to August 1998.

European Capital's investment criteria

The European Capital Group targets companies that generally meet a combination of the following criteria: a robust track record, strong cash flows, significant growth prospects, strong competitive positioning, an experienced management team with a significant ownership interest and potential for the European Capital Group to gain liquidity and/or realise appreciation in its investments.

The European Capital Group expects to make investments which are typically between €5 million and €125 million. European Capital sponsored buyouts would typically be of companies with an enterprise value of between €50 million and €500 million. The European Capital Group may however participate in co-investments with the American Capital Group in transactions involving companies with a larger enterprise value. The European Capital Group will be leveraged to enhance investment returns.

Existing Portfolio

As at 4 May 2007 the largest ten investments held by the European Capital Group were:

Notes:
- The relevant legal entities will be specified in the Prospectus.
- A "One-Stop Buyout™" involves European Capital providing senior and mezzanine debt and a majority of the equity in the buyout of a company.

Dividends and dividend policy

European Capital expects to pay dividends quarterly depending on its level of operating earnings. For 2007, European Capital is targeting a dividend of €0.13 per Ordinary Share payable in respect of the third quarter of 2007 and a dividend of €0.14 per Ordinary Share payable in respect of the fourth quarter of 2007 from income earned in the second half of 2007. Thereafter, it is anticipated that approximately 50 per cent. of its net operating income will be paid out quarterly in cash dividends, and it is anticipated that 100 per cent. of net capital gains will be retained and redeployed.

European Capital declared its first dividend, of €0.29 per Preferred Share, in the fourth quarter of 2006, which has been paid. The Board of Directors has also declared and paid a further dividend of €0.21 per Preferred Share in respect of the first quarter of 2007. The aggregate cash cost to European Capital of these dividends was €37.5 million.

European Capital's dividend target is based on a number of assumptions and should not, therefore, be regarded as a profit or earnings forecast. Certain principal assumptions relating to European Capital's dividend target will be set out in the Prospectus. There can be no guarantee that European Capital will be able to pay dividends at such targeted level or at all.

Management of European Capital's investments

European Capital and its wholly-owned subsidiaries European Capital S.A. SICAR and ECAS Sarl have entered into a new investment management agreement with the Investment Manager (the "Investment Management Agreement"), under which the Investment Manager is responsible for the management of their investments within the investment strategy determined by the Board of Directors. The Investment Manager is entitled to the payment of certain management fees and to reimbursement of certain fees, costs and expenses under the Investment Management Agreement, and also to a termination fee in respect of the investment management agreement which applied prior to Listing.

The Investment Manager

As at 31 December 2006, the Investment Manager had assets under management (at fair value) of €1.1 billion, all of which were managed in the European Capital Group. At present, the Investment Manager only manages the investments of the European Capital Group and ECFS currently only operates to assist the Investment Manager. ECFS is authorised and regulated in the UK by the FSA.

ECFS has offices in London, Paris and Frankfurt and has a total of 70 employees. ECFS' London office has 47 employees and is headed by two managing directors, Ms. Nathalie Faure Beaulieu and Mr. Simon Henderson. The Paris office of ECFS has 21 employees and is headed by managing director Mr. Jean Eichenlaub. Mr. Roland Cline, another managing director, is also located in the Paris office. The Frankfurt office of ECFS' has two employees and is headed by managing director Mr. Robert von Finckenstein, who started work for ECFS on 2 April 2007.

The five managing directors have over 50 years of combined experience in the private equity industry.

ECFS intends in due course to open an office in Madrid. The Investment Manager is actively searching for an investment professional to lead a new office in Madrid. ECFS expects that over time it will open additional offices in other major European financial centres. ECFS also intends to recruit additional investment professionals for its London and Paris offices within the next few months and to expand its existing Investment Teams.

The contents of this announcement, which has been issued by European Capital and is the sole responsibility of European Capital, has been approved by JPMorgan Cazenove solely for the purpose of section 21 of the Financial Services and Markets Act 2000, as amended.

Citi, JPMorgan Cazenove and Merrill Lynch, each of which is authorised and regulated in the UK by the Financial Services Authority, are advising European Capital and no one else in connection with the Offer, the contents of this announcement and any matter referred to herein, and will not be responsible to anyone other than European Capital for providing the protections afforded to the respective customers of Citi, JPMorgan Cazenove and Merrill Lynch nor for providing any advice in relation to the Offer, the contents of this announcement or any matters referred to herein.

This announcement is an advertisement and not a prospectus and investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of information in the Prospectus. Copies of the Prospectus will, following publication, be available from the offices of JPMorgan Cazenove at 20 Moorgate, London EC2R 6DA and at the registered office of European Capital at First Floor, Dorey Court, Admiral Park, St Peter Port, Guernsey GY1 6HJ.

This announcement (or any part of it) and the information contained herein is not to be reproduced, published, distributed, passed on, or the contents otherwise divulged, directly or indirectly, in or into the United States, Canada, Australia, Japan or the Republic of South Africa, or any other jurisdiction where such reproduction or distribution would be unlawful, and does not constitute, or form part of, an offer of securities for sale into the United States, Canada, Australia, Japan or the Republic of South Africa, or any other jurisdiction. This announcement does not constitute or form part of an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities law of any such jurisdiction.

The shares to be offered in the Offer have not been, and will not be, registered under the US Securities Act of 1933, as amended, or under the US Securities Exchange Act of 1934, as amended, or with any securities regulatory authority of any state or other jurisdiction in the US for offer or sale as part of their distribution and may not be offered or sold in the US except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable state securities laws. There will be no public offering of the securities in the United States.

Securities in European Capital have not been and will not be registered under the applicable securities laws of Australia, Canada, Japan or the Republic of South Africa and, subject to certain exceptions, may not be offered or sold within Australia, Canada, Japan or the Republic of South Africa.

The Offer and the distribution of this announcement and other information in connection with the Offer in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

The price and value of, and income from, shares may go down as well as up. Potential investors should consult a professional adviser as to the suitability of the Offer for the individual concerned.

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities and any purchase of or application for securities of the Company pursuant to the Offer should only be made on the basis of the information contained in the Prospectus. This announcement does not constitute a recommendation concerning the Offer. The price and value of securities may go down as well as up. Persons needing advice should contact a professional adviser.

This announcement includes statements that are, or may be deemed to be, 'forward-looking statements'. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms 'believes', 'estimates', 'plans', 'projects', 'anticipates', 'expects', 'intends', 'may', 'will', or 'should' or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts and include statements regarding European Capital's intentions, beliefs or current expectations concerning, among other things, European Capital's results of operations, financial condition, liquidity, prospects, growth and strategies.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. A number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, the factors to be described in the risk factors section of the Prospectus and the factors to be described in the operating and financial review section of the Prospectus.

Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this announcement reflect European Capital's view with respect to future events as at the date of this announcement and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to European Capital's operations, results of operations, growth strategy and liquidity. Save as required by law or by the Listing Rules, Disclosure and Transparency Rules or Prospectus Rules of the Financial Services Authority, European Capital undertakes no obligation publicly to release the results of any revisions to any forward-looking statements in this announcement that may occur due to any change in its expectations or to reflect events or circumstances after the date of this announcement.

In connection with the Offer, Citi, as stabilising manager, or any of its agents, may (but will be under no obligation to), to the extent permitted by law, over allot or effect other transactions intended to enable it to satisfy any over allotments or which stabilise, maintain or otherwise affect the market price of Ordinary Shares in the Company or any options, warrants or rights with respect to, or interest in, the Ordinary Shares or other securities of the Company, in each case at levels which might not otherwise prevail in the open market. The stabilising manager is not required to enter into such transactions and such transactions may be effected on the London Stock Exchange and any other securities market, over the counter market or otherwise. Such transactions, if commenced, may be discontinued at any time and may only be entered into between commencement of conditional trading of the Ordinary Shares on the London Stock Exchange and thirty days thereafter. In connection with the Offer, the stabilising manager may, for stabilisation purposes, over allot Ordinary Shares up to a maximum of 15% of the total number of Ordinary Shares comprised in the Offer. For the purposes for allowing it to cover short positions resulting from any such over-allotments and/or from sales of Ordinary Shares effected by it during the stabilisation period, the stabilising manager has entered into the Over-allotment Option with the Company pursuant to which the stabilisation manager may purchase or procure purchasers for additional Ordinary Shares up to a maximum of 15% of the total number of Ordinary Shares comprised in the Offer at the Offer Price. The Over-allotment Option may be exercisable in whole or in part on one or more occasions, upon notice by the stabilisation manager, at any time on or before the thirtieth day after the commencement of conditional trading of the Ordinary Shares on the London Stock Exchange.

Information in this announcement or any of the documents relating to the Offer cannot be relied upon as a guide to future performance.

Stabilisation/FSA