Allied Capital Announces the Buyout of Legacy Partners Group, LLC

Allied Capital Announces the Buyout of Legacy Partners Group, LLC

Business Editors

WASHINGTON–(BUSINESS WIRE)–May 26, 2004

Allied Capital Corporation (NYSE:ALD) announced today that it has completed the buyout of Legacy Partners Group, LLC (“Legacy Partners”). Allied Capital will provide approximately $12 million in debt and equity financing for the purchase of the company and for future funding commitments.

Legacy Partners is a financial advisory firm that focuses on middle market and emerging growth companies, providing merger and acquisition advice and capital raising through privately placed securities. The company will be an independently managed portfolio company of Allied Capital and will be led by Jack Maier and Jim Frawley, who each possess an outstanding record in middle market investment banking services.

“Most of the large investment banks are committing their capital and resources to their largest fee paying clients, which require multiple investment banking products, as well as traditional commercial banking and asset management services,” said Bill Walton, Chairman and CEO of Allied Capital. “We believe a significant opportunity exists to provide financial advisory and investment banking services to high quality, growth-oriented firms in the middle market, and Legacy Partners is well positioned to address this niche.”

According to Mr. Maier, “The financial commitment from Allied Capital will allow us to continue to build our team and take advantage of the significant opportunities we see in the marketplace. We are delighted to have Allied Capital’s support and believe this relationship will result in enhanced opportunities for both companies.”

About Allied Capital

Allied Capital is the nation’s largest business development company and provides long-term debt and equity investment capital to support the expansion of companies in a variety of industries. The company also participates in the real estate capital markets as an investor in non-investment grade commercial mortgage-backed securities, collateralized debt obligation bonds and preferred shares. The company is headquartered in Washington, DC. For more information, please visit the web site at www.alliedcapital.com, call Allied Capital Investor Relations toll-free at (888) 818-5298, or e-mail us at ir@alliedcapital.com.

About Legacy Partners Group

Legacy Partners Group, LLC is a registered broker-dealer that provides advisory and investment banking services to companies in the middle market. Legacy Partners, based in New York, focuses on companies with enterprise values of up to $500 million and provides services, including merger and acquisition advice and capital raising through privately placed securities. For more information, please visit the website at www.legacypartnersgroup.com.

Forward-Looking Statements

The information contained in this press release contains forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, and these factors are enumerated in Allied Capital’s periodic filings with the Securities and Exchange Commission.

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