First publicly-traded alternative asset manager joins S&P 500

American Capital is the first publicly traded alternative asset management company to be included in the S&P 500. ‘We are honored and proud to be recognized among the foremost companies in the world,’ says Malon Wilkus, American Capital chairman and chief executive. ‘Inclusion in the S&P 500, one of the most commonly used benchmarks for the overall U.S. stock market, validates American Capital’s strategy to build the first and one of the largest publicly traded alternative asset managers and the largest publicly traded private equity fund in the U.S. In less than ten years from our August, 1997 initial public offering, American Capital has grown to be the 355th largest US publicly traded company in the S&P 500, in terms of market capitalization, a tremendous achievement.

‘During that period, we have paid out over USD1.7bn of dividends and provided a 22 per cent compounded annual return to our shareholders. Among other achievements, we pioneered the formation of permanent capital in the private equity industry. We pioneered the securitization of our asset class and achieved BBB investment grade ratings. We established and manage European Capital, a USD2.5bn private equity fund, and recently listed it on the London Stock Exchange. I congratulate American Capital’s employees for their hard work and well earned recognition and thank our shareholders for their support.’

‘Over the past ten years, we have built an institution with one of the best capabilities to originate, underwrite, finance, syndicate, monitor and exit alternative investments,’ said John Erickson, chief financial officer. ‘As one of the lowest leveraged financial institutions, limited by law to one to one debt to equity, American Capital has outperformed more levered financial institutions in good times as well as troubled times. Over the past ten years, we have outperformed the S&P 500 in every year with the exception of our first full year as a public company, including during the three years that the S&P 500 had negative returns. And as a result, we have provided our shareholders with consistent, excellent performance. The sources, flexibility and cost of our capital have been unmatched. Among other things, being in the S&P 500 will help us tell our unique story to a wider investor audience.’

‘American Capital raised USD155m in its 1997 Nasdaq listing. Now American Capital and the funds it manages have invested approximately USD21bn in over 370 portfolio companies through twelve offices worldwide,’ said Ira Wagner, chief operating officer. ‘We have done this with the best market coverage and largest transaction flow in our industry, and by exercising considerable investment discipline. We became the leading provider of sub-debt and equity to the middle market, and we have transformed it. Inclusion in the S&P 500 is testimony to our operational and financial success.’

‘This significant milestone recognizes the strengths of our business model and organization and the quality of American Capital’s employees,’ said Samuel Flax, General Counsel. ‘Our corporate and reporting structure, unique in the S&P 500, makes us a leader in good corporate governance and accurate financial reporting. Our independent board and use of a third party valuation firm provides important validation of the quality of our assets and balance sheet and our ability to maintain investment discipline. When taken together with our payment of over 90 per cent of our ordinary taxable income in dividends, we believe there is no firm more open and transparent to its stockholders.’