FOR IMMEDIATE RELEASE:
13 February 2008

Contact
John Erickson, Dir., European Capital Financial Services (Guernsey) Limited +1 (301) 951-6122
Tom McHale, Dir., European Capital Financial Services Limited +1 (301) 951-6122
Justin Cressall, Equity Capital Markets, European Capital Financial Services Limited: +1 (301) 951-6122

EUROPEAN CAPITAL REPORTS €0.90 NOI AND €0.95 REALISED EARNINGS IN 2007
FORECASTS 68% DIVIDEND INCREASE IN 2008 TO €0.62
FORECASTS Q1 DIVIDEND OF €0.15

St. Peter Port, Guernsey – 13 February 2008 – European Capital Limited (“European Capital”) (LSE: ECAS) announced today its results for the fourth quarter and full year of 2007.

FOURTH QUARTER 2007 DIVIDEND GUIDANCE

European Capital reiterates guidance for a fourth quarter 2007 dividend of €0.14 per share. This would be an 8% increase over the third quarter 2007 dividend of €0.13 per share. It is in line with the dividend target announced at the time European Capital declared its second quarter 2007 dividend and represents a 37% increase from guidance provided in the Listing Prospectus. European Capital has now paid a total of €24.9 million in dividends since its May 2007 initial public offering (“IPO”).

2007 RESULTS

European Capital announced today its results for the quarter and year ended 31 December 2007. Net Operating Income (“NOI”) for the year increased 109% to €0.90 per share, compared to €0.43 per share for 2006. For the quarter, NOI increased 29% to €0.27 per share, compared to €0.21 per share in the fourth quarter of 2006.

“European Capital had a strong 2007 and is in an excellent position to have superior performance in 2008,” said Malon Wilkus, European Capital Chairman. "However, the market has dramatically priced down financial stocks, and European Capital, being a young company, has experienced more than its share of these declines. We and our Investment Manager could not be more focused on this issue. We are reviewing all our options with respect to our extremely low price to book value and we will do all we can to see it rise in 2008."

Earnings less appreciation and depreciation (“Realised Earnings”), increased 121% to €0.95 per share for 2007, compared to €0.43 per share for 2006. For the quarter, Realised Earnings increased 23% to €0.27 per share, compared to €0.22 per share for the fourth quarter of 2006. Realised Earnings return on equity at cost for 2007 was 10%. 2007 Realised Earnings exceeded 2007 total dividends by 64%.

Earnings increased 31% to €0.68 per share for 2007, compared to €0.52 per share for 2006. For the quarter, Earnings decreased 69% to €0.09 per share, compared to €0.29 per share for the fourth quarter of 2006. Earnings return on equity for 2007 was 7%.

As previously announced, fourth quarter 2007 dividends were €0.14 per share. For the quarter, European Capital’s Realised Earnings of €0.27 per basic share exceeded the dividend by 93%.

European Capital’s net asset value (“NAV”) per share at 31 December 2007 was €9.67, a €0.06 decrease, including dividend distributions of €0.37 per share, from the 10 May 2007 IPO NAV per share of €9.73. The 31 December 2007 NAV was €0.04 per share less than at the end of the prior quarter.

“The credit quality of our portfolio is excellent and we believe that the performance of European Capital’s portfolio remains very strong,” said John Erickson, Director of European Capital Financial Services (Guernsey) Limited, European Capital’s Investment Manager. “Delinquencies and non-accruing loans are at a low level of 1.9% of the portfolio at cost. Commercial credit quality remains outstanding, spreads have widened, and many of our highly geared competitors are experiencing difficulty raising capital. With €2.3 billion of capital resources, we continue to have access to capital, permitting us to meet continued mid-market demand. Subsequent to our IPO in May 2007 we raised an unsecured multicurrency revolving line of credit in August 2007, a time when access to capital was closed to many financial institutions. Our ability to raise capital in this environment is also an ongoing affirmation of our business model, the outstanding quality of the Investment Manager’s investment team and the portfolio.”

For the year, European Capital invested €1.6 billion and received €0.7 billion of proceeds from realisations of portfolio investments. In the fourth quarter of 2007, European Capital invested €180 million and received €112 million of proceeds from realisations of portfolio investments.

The weighted average effective interest rate on European Capital's total investments in debt securities at 31 December 2007 was 12.7%, 50 basis points higher than at 30 September 2007. As of 31 December 2007, loans at cost of €30 million in relation to one Portfolio Company, which had been fully depreciated, were on non-accrual. These non-accruing loans represented 1.9% of total loans at cost and 0.0% of total loans at fair value at 31 December 2007.

“European Capital possesses significant competitive advantages as many of our competitors face a difficult environment in which many middle market investors are trying to find their way,” said Ira Wagner, President of European Capital Financial Services Limited (“ECFS”). “European Capital’s One Stop Buyouts™, in which we fund senior debt, mezzanine debt and equity, have become even more important to sellers of companies in this uncertain financing environment. In addition, European Capital’s resources and ability to underwrite mezzanine assets is in great demand from other private equity funds who are seeking certainty of financing for their transactions. Financing is going to be much harder to raise for most private equity funds in the current environment, mezzanine debt is going to play an increasingly significant role and we are superbly positioned to take advantage of these market conditions. Although investment opportunities in the second half of 2007 declined, due to the significant decline of large multi-billion euro transactions, the mid-market targeted by our four offices remains active. At the close of 2007, we were reviewing approximately €9 billion of opportunities. We continue to find mid-market companies with robust track records, strong cash flows, significant growth prospects, highly competitive positioning, experienced management teams and the potential for European Capital to gain liquidity and/or realise appreciation in its investments. We continue to make progress increasing our market coverage across Europe, with offices in London, Paris, Frankfurt and Madrid, and having investments in the U.K., Germany, France, Luxembourg, the Netherlands, Sweden, Norway, Spain, Switzerland and Italy.”

Since inception European Capital has earned a 15% compounded annual return, including interest, dividends, fees and net gains, on 27 realisations of senior debt, subordinated debt and equity investments, totalling €1 billion of invested capital. These realisations represent 34% of all amounts invested by European Capital since inception.

2008 DIVIDEND GUIDANCE

European Capital forecast total 2008 dividends of €0.62 per share, a 68% growth over post-IPO 2007 dividends of €0.37 per share in 2007. The 2008 dividends per share are forecast to be in the following quarterly amounts:

€0.15 for Q1 2008;
€0.15 for Q2 2008, 50% increase over Q2 2007;
€0.16 for Q3 2008, 23% increase over Q3 2007; and
€0.16 for Q4 2008, 14% increase over Q4 2007.

THIRD PARTY VALUATION OF PORTFOLIO INVESTMENTS

European Capital’s Board of Directors is responsible for determining the fair value of European Capital’s portfolio investments on a quarterly basis. In that regard, the Board retains Houlihan Lokey Howard & Zukin Financial Advisors Inc. ("Houlihan Lokey") to assist it by having Houlihan Lokey regularly review its fair value determinations. Houlihan Lokey is a leading valuation firm engaged in approximately 1,000 valuation assignments per year for clients worldwide. Each quarter, Houlihan Lokey reviews European Capital’s determination of the fair value of all portfolio companies that have been a portfolio company at least one year and that have a fair value in excess of €10 million. In the fourth quarter of 2007, Houlihan Lokey reviewed valuations of 23 portfolio company investments having an aggregate €741 million in fair value as of the period end. In addition, Houlihan Lokey representatives attend European Capital’s quarterly valuation meetings and provide periodic reports and recommendations to the Audit Committee of the Board of Directors.

Financial highlights for the quarter are as follows:
Click here to view the Consolidated Balance Sheets, Consolidated Statements of Operations, Financial Information, and Static Pool Tables

A summary of European Capital's dividend history post IPO and forecast follows. For more information, please visit our website at www.EuropeanCapital.com or call our Investor Relations Department at +44 (0)800 458 0770.

SHAREHOLDER CALL

European Capital invites shareholders, analysts and other interested persons to attend the European Capital Shareholder Call on Thursday 14 February at 14:30 GMT (9:30 EST). Callers within the UK can dial +44 (0)800 678 1161, while other callers from within Europe should dial +44 (0) 207 740 9501. Callers within the United States should dial +1 (866) 804-8688. The access code for callers is 320 568.

Point your browser to www.EuropeanCapital.com and click on the Q4 2007 Shareholder Call Slide Show button.

BEFORE THE CALL:

REVIEW SLIDE PRESENTATION IN ADVANCE OF THE SHAREHOLDER CALL The quarterly shareholder presentation includes a slide presentation to accompany the call that participants may download and print prior to the call. You may wish to take the time to review the slides in advance of the Shareholder Call.

DURING THE CALL:

VIEW STREAMING SLIDE PRESENTATION DURING THE SHAREHOLDER CALL During the Shareholder Call you may watch and listen to the webcast or listen to the Shareholder Call by phone and step through the slides at your own pace.

AFTER THE CALL:

LISTEN AND VIEW AUDIO SLIDE PRESENTATION AFTER THE CALL The audio of the Shareholder Call combined with the slide presentation will be made available after the call on 14 February on our website www.EuropeanCapital.com.

AUDIO ONLY PRESENTATION AVAILABLE AFTER THE SHAREHOLDER CALL:

There will be a phone recording available from 23:59 GMT Thursday 14 February until 23:59 GMT Thursday 28 February. If you are interested in hearing the recording of the presentation, please dial +44 (0)800 032 9687 or +44 (0)207 136 9233. The access code for callers is 77284642.

For further information or questions, please do not hesitate to call our Investor Relations Department at +44 (0)20 7539 7100.

ABOUT EUROPEAN CAPITAL

European Capital is a publicly traded investment company for pan-European equity, mezzanine and senior debt investments with current capital resources of approximately €2.3 billion ($3.3 billion). It is managed by European Capital Financial Services (Guernsey) Limited, an indirect wholly-owned affiliate of American Capital Strategies Ltd. ECFSG, together with its wholly owned subsidiary European Capital Financial Services Ltd (“ECFS”), is referred to as the “Investment Manager”. ECFS has offices in Paris, London, Frankfurt and Madrid. As of 31 December 2007 the Investment Manager had 43 investment professionals and 61 support staff.

European Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts and provides capital directly to private and public companies headquartered predominantly in Europe. European Capital generally invests between €5 million and €500 million per transaction in equity, mezzanine debt and senior debt to fund growth, acquisitions and recapitalisations.

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 primarily in Europe.

European Capital seeks to achieve this through pursuing the following types of investments:

European Capital One- Stop Buyouts™
Through our One Stop Buyouts™, European Capital provides equity, mezzanine debt and senior debt as the lead investor in the buyout of private and public companies.

Mezzanine Direct with Sponsors
European Capital provides debt and equity financing for buyouts sponsored by private equity firms where European Capital is either the sole or lead mezzanine debt investor.

Syndicated Mezzanine and Senior Debt
European Capital provides mezzanine and senior financing for buyouts sponsored by private equity firms where European Capital is neither the sole nor lead mezzanine or senior debt investor.

Direct Investments
European Capital provides debt and equity financing directly to private and public companies, which is used for growth, acquisitions or recapitalisations, and investing in structured finance vehicles.

Companies interested in learning more about European Capital's flexible financing should contact Simon Henderson or Nathalie Faure Beaulieu at + 44 (0)20 7539 7000 in London, Jean Eichenlaub at + 33 (0)1 40 68 06 66 in Paris, Robert von Finckenstein at +49 (0) 69 71 71 297-0 in Frankfurt, or Luis Felipe Castellanos at +(34) 91 423 27 60 in Madrid, or visit the website at www.EuropeanCapital.com.

ABOUT AMERICAN CAPITAL

American Capital Strategies Ltd. (Nasdaq: ACAS), with $19 billion in capital resources under management, is an affiliate of European Capital and a member of the S&P 500. It is the largest U.S. publicly traded private equity firm 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, recapitalisations and securitisations. American Capital and its affiliates invest from $5 million to $800 million per company in North America and €5 million to €500 million per company in Europe.

IMPORTANT DISCLOSURES

This document may contain “forward-looking statements”. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Many of these risks and uncertainties relate to factors beyond European Capital’s control or which cannot be estimated precisely. These factors include, but are not limited to, uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions, and changes in the conditions of the industries in which European Capital has made investments. Actual outcomes and results may therefore differ materially from any outcomes or results expressed or implied by any such forward-looking statements.

Performance data quoted above represents past performance of European Capital. Past performance does not guarantee future results and the investment return and principal value of an investment in European Capital will likely fluctuate. Consequently, an investor's shares, when sold, may be worth more or less than their original cost. Additionally, European Capital’s current performance may be lower or higher than the performance data quoted above.

Nothing in this document is intended to be a profit forecast.