Impressions of American Capital Strategies

Staff writer Thomas Heath paid a visit to the offices of American Capital Strategies today, to find out a little more about the Bethesda-based private equity firm.

Malon Wilkus is the founder and chairman of American Capital Strategies and works in a 14th floor office high above the Bethesda Metro. The office has a really cool giant flat screen television on one wall that changes constantly to show different images of Impressionist masterpieces. I swear I saw a Monet on the screen for a few seconds.

American Capital, which provides financing to small privately held companies, is in an mandatory quiet period because it's in the middle of selling $500 million in senior, unsecured notes. But I was able to find out that the firm, which Wilkus started in 1986 and took public 10 years ago, joined the S&P 500 just a few days back. It replaces Dollar General Corp., which is being acquired by buyout firm Kohlberg Kravis Roberts & Co.

With a market cap of $8 billion and with $15 billion in assets under management, American Capital bills itself as the largest publicly traded private equity fund in the United States. It's also one of the largest companies, by market cap, in the Washington region. That means you can actually buy stock in American Capital. Most private equity companies are just that, private.

That's changing fast. Blackstone Group recently sold stock on the New York Stock Exchange and KKR has since announced plans to follow suit. The Carlyle Group, Washington's own private equity giant with $58.5 billion under management, is also expected to go public in the coming months.

Wilkus, who would not comment for the record yesterday when I stopped by because the company is in its "quiet period," clearly seems to feel that American Capital should be getting more attention.

The company recently announced it was opening an office in Madrid, its fourth in Europe. American Capital last month raised $1 billion in the equity markets through an issuance of stock.

Wilkus makes about $1.8 million a year and owns about 1.5 percent of American Capital stock, making him its the biggest individual shareholder. That's a good place to be, these days. The dividend yield is 8.1 percent on Thursday afternoon. The company has returned 23 percent a year to its shareholders since going public a decade ago.
-- Thomas Heath

By Mike Shepard  |  July 12, 2007; 3:59 PM ET  | Category:  Finance
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