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<SEC-DOCUMENT>0000021847-02-000059.txt : 20020414
<SEC-HEADER>0000021847-02-000059.hdr.sgml : 20020414
ACCESSION NUMBER:		0000021847-02-000059
CONFORMED SUBMISSION TYPE:	N-2
PUBLIC DOCUMENT COUNT:		10
REFERENCES 429:			gov.sec.edgar.dataobjects.object.PDSubFN429Data@742058b8
FILED AS OF DATE:		20020222

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LIBERTY ALL STAR EQUITY FUND
		CENTRAL INDEX KEY:			0000799195
		IRS NUMBER:				042935840
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		N-2
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-83252
		FILM NUMBER:		02556323

	BUSINESS ADDRESS:	
		STREET 1:		FEDERAL RESERVE PLZ
		CITY:			BOSTON
		STATE:			MA
		ZIP:			02210
		BUSINESS PHONE:		6177226000

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LIBERTY ALL STAR EQUITY FUND
		CENTRAL INDEX KEY:			0000799195
		IRS NUMBER:				042935840
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		N-2
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-04809
		FILM NUMBER:		02556324

	BUSINESS ADDRESS:	
		STREET 1:		FEDERAL RESERVE PLZ
		CITY:			BOSTON
		STATE:			MA
		ZIP:			02210
		BUSINESS PHONE:		6177226000
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-2
<SEQUENCE>1
<FILENAME>n20202.txt
<DESCRIPTION>LASEF RIGHTS OFFERING - INITIAL FILING
<TEXT>

    As filed with the Securities and Exchange Commission on February 22, 2002

                                                    1933 Act File No. 333-
                                                    1940 Act File No. 811-4809

                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    Form N-2
                        (Check appropriate box or boxes)

[X]      REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ ]      Pre-Effective Amendment No. _________

[ ]      Post-Effective Amendment No._________

                                      and

[X]      REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[X]      Amendment No. 18

                        Liberty All-Star Equity Fund
                ---------------------------------------------------
                (Exact Name of Registrant as Specified in Charter)

                               One Financial Center
                           Boston, Massachusetts 02111-2621
                     -----------------------------------------
                     (Address of Principal Executive Offices)
                     (Number, Street, City, State, Zip Code)

                                 (617) 426-3750
               --------------------------------------------------
               Registrant's Telephone Number, including Area Code


         Jean S. Loewenberg                       Jeremiah J. Bresnahan
              Secretary                              Bingham Dana LLC
     Liberty All-Star Equity Fund                  150 Federal Street
        One Financial Center                         Boston, MA 02110
          Boston, MA 02111

           Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of this Registration Statement.

If any of the securities  being registered on this form are offered on a delayed
or continuous  basis in reliance on Rule 415 under the  Securities  Act of 1933,
other than securities  offered in connection with a dividend  reinvestment plan,
check the following box. [X]

   It is proposed that this filing will become effective (check appropriate box)

[X] when declared effective pursuant to section 8(c)
[ ] immediately upon filing pursuant to paragraph (b) of Rule 486
[ ] on (date) pursuant to paragraph (b) of Rule 486
[ ] 60 days after  filing  pursuant  to  paragraph  (a) of Rule 486
[_] on(date) pursuant to paragraph (a) of Rule 486

     [_] This  post-effective  amendment  designates a new effective  date for a
         previously filed registration statement.
     [_] The Form is filed to  register  additional  securities  for an offering
         pursuant to Rule 462(b) under the Securities Act and the Securities Act
         registration number of the earlier effective registration statement is
         --------.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICIALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

<PAGE>

<TABLE>
<CAPTION>

                                                PROPOSED                  PROPOSED
TITLE                                           MAXIMUM                   MAXIMUM            AMOUNT OF
OF SECURITIES             AMOUNT                OFFERING PRICE            AGGREGATE          REGISTRATION
BEING REGISTERED          BEING REGISTERED(1)   PER UNIT(1)               OFFERING PRICE(1)  FEE(1)
- ----------------          -------------------   --------------            --------------     -------------
<S>                       <C>                    <C>                     <C>                  <C>
Shares of Beneficial
    Interest              10,910,830             $11.15                  $121,655,755         $11,193

</TABLE>

(1)  Estimated solely for the purposes of calculating the Registration fee in
     accordance with Rule 457(c) under the Securities Act of 1933.  Based
     on the average of the high and low sales prices reported on the
     New York Stock Exchange, Inc. on February 15, 2002.

<PAGE>


                         [ ] Rights for [ ] Shares

                         LIBERTY ALL-STAR EQUITY FUND

                        Shares of Beneficial Interest

Liberty  All-Star Equity Fund ("All-Star" or the "Fund") is offering rights (the
"Rights")  to its  shareholders  (the  "Offer").  These Rights will allow you to
subscribe for new shares of beneficial interest of All-Star (the "Shares").  For
every ten Rights that you receive,  you may buy one new All-Star Share. You will
receive one Right for each outstanding  All-Star Share you own on [ ], 2002 (the
"Record  Date").  Fractional  Shares will not be issued upon the exercise of the
Rights.  Accordingly,  Shares may be purchased  only pursuant to the exercise of
Rights in integral  multiples of ten. Also,  Shareholders on the Record Date may
purchase  Shares not  acquired by other  shareholders  in this Rights  offering,
subject  to  limitations  discussed  in  this  prospectus.  The  Rights  are not
transferable and will not be admitted for trading on the New York Stock Exchange
("NYSE").  See "The Offer." THE SUBSCRIPTION  PRICE PER SHARE WILL BE 95% OF THE
LOWER OF (i) THE LAST REPORTED SALE PRICE ON THE NYSE ON [ ], 2002 (the "Pricing
Date")  OF A SHARE  OF  ALL-STAR,  OR (ii)  THE NET  ASSET  VALUE  OF A SHARE OF
ALL-STAR ON THAT DATE.

THE OFFER  WILL  EXPIRE AT 5:00  P.M.,  NEW YORK  CITY  TIME,  ON [ ], 2002 (the
"Expiration  Date").  SINCE THE CLOSE OF THE OFFERING ON THE EXPIRATION  DATE IS
PRIOR TO THE PRICING DATE, SHAREHOLDERS WHO CHOOSE TO EXERCISE THEIR RIGHTS WILL
NOT KNOW THE SUBSCRIPTION PRICE PER SHARE AT THE TIME THEY EXERCISE SUCH RIGHTS.

For additional  information,  please call Georgeson  Shareholder  Communications
Inc. (the "Information Agent") toll free at (888) [ ].

All-Star  is  a  multi-managed  diversified,  closed-end  management  investment
company that  allocates its  portfolio  assets on an  approximately  equal basis
among several independent  investment  organizations  (currently five in number)
("Portfolio  Managers")  having  different  investment  styles  recommended  and
monitored by Liberty Asset Management Company,  All-Star's fund manager ("LAMCO"
or "Fund Manager").  All-Star's investment objective is to seek total investment
return, comprised of long term captial appreciation and current income. It seeks
its investment objective through investment primarily in a diversified portfolio
of equity  securities.  An  investment  in All-Star is not  appropriate  for all
investors.  No assurances can be given that All-Star's investment objective will
be achieved. For a discussion of certain risk factors and special considerations
with respect to owning Shares of All-Star, see "Special  Considerations and Risk
Factors" beginning on page [ ] and "Investment Objective, Policies and Risks" on
page [ ] of this Prospectus.

The address of All-Star is Federal Reserve Plaza, One Financial Center,  Boston,
Massachusetts  02211  and its  telephone  number is (800)  542-3863.  All-Star's
Shares are listed on the NYSE under the symbol "USA."

All-Star  announced  the terms of the Offer before the opening of trading on the
NYSE on February 13, 2002. The net asset value per Share of beneficial  interest
of All-Star  at the close of  business  on  February  12, 2002 and [ ], 2002 was
$10.14 and $[ ],  respectively,  and the last  reported sale price of a Share on
such Exchange on those dates was $11.06 and $[ ], respectively.

Neither  the  Securities  and  Exchange  Commission  nor  any  State  securities
commission  has approved or disapproved  these  securities or determined if this
Prospectus  is truthful or  complete.  Any  representation  to the contrary is a
crime.

<TABLE>
<CAPTION>
<S>                                            <C>                         <C>                           <C>

                                                Subscription Price(1)              Sales Load            Proceeds to All-Star(2)
- ---------------------------------------------- --------------------------- ----------------------------- -------------------------
- ---------------------------------------------- --------------------------- ----------------------------- -------------------------
Per Share.....................................        $[ ]                         NONE                        $[ ]
- ---------------------------------------------- --------------------------- ----------------------------- -------------------------
- ---------------------------------------------- --------------------------- ----------------------------- -------------------------
Total..........................................       $[ ]                         NONE                        $[ ]
- ---------------------------------------------- --------------------------- ----------------------------- -------------------------
</TABLE>

(1)  Estimated  based  on assumed Subscription  Price  of  95%  of the  net
     asset  value  on [ ],  2002.

(2) Before deduction of expenses payable by All-Star, estimated at $315,000.

Shareholders  who do not exercise  their Rights should expect that they will, at
the  completion of the Offer,  own a smaller  proportional  interest in the Fund
than if they exercised their Rights. As a result of the Offer you may experience
an immediate  dilution of the  aggregate  net asset value of your Shares,  which
under  certain  circumstances,   could  be  substantial.  This  is  because  the
Subscription  Price per Share  and/or the net  proceeds to All-Star for each new
Share  sold  will be less  than  All-Star's  net  asset  value  per Share on the
Expiration Date.  All-Star cannot state precisely the extent of this dilution at
this time  because it does not know what the net asset value or market price per
Share will be when the Offer  expires or what  proportion  of the Rights will be
exercised.

This Prospectus sets forth concisely the information that a shareholder ought to
know  before  exercising  his or her Rights.  Investors  are advised to read and
retain it for future reference. A Statement of Additional Information dated [ ],
2002  has  been  filed  with  the  Securities  and  Exchange  Commission  and is
incorporated  by reference in its entirety  into this  Prospectus.  The table of
contents of the Statement of Additional  Information appears on page [ ] of this
Prospectus,  and a copy is  available  at no charge by calling  the  Information
Agent at (888) [ ].

                The date of this Prospectus is [ ], 2002.

                          PROSPECTUS SUMMARY

This summary  highlights some information that is described more fully elsewhere
in this Prospectus.  It may not contain all of the information that is important
to you. To  understand  the Offer  fully,  you should  read the entire  document
carefully, including the risk factors.

Purpose of the Offer

The Board of Trustees of All-Star  has  determined  that it would be in the best
interest of All-Star  and its  Shareholders  to increase  the assets of All-Star
available  for  investment  so  that  it may be in a  better  position  to  take
advantage of investment  opportunities that may arise. The Offer seeks to reward
existing  shareholders  in All-Star by giving them the  opportunity  to purchase
additional  Shares at a price  below  market  and/or net asset value and without
incurring any brokerage commissions. See "The Offer-Purpose of the Offer."

Important Terms of the Offer
<TABLE>
<CAPTION>

<S>                                                                  <C>

Total number of Shares available for primary subscription......      [           ] Shares
Number of Rights you will receive for each outstanding
   Share you own on the Record Date............................      One Right for every one Share

Number of Shares you may purchase with your Rights at the
   Subscription Price per Share...............................       One Share for every ten Rights
Subscription Price ..........................................        95% of the lower of (i) the last reported sale price on the
                                                                     NYSE on [          ], 2002 (the "Pricing Date") of a Share
                                                                     of All-Star, or (ii) the net asset value of a Share of
                                                                     All-Star on the Pricing Date.
</TABLE>

- --------------------------------------------------------------------------------
                        Shareholders' inquiries should be directed to:
                          Georgeson Shareholder Communications Inc.
                                    (888) [ ]
- --------------------------------------------------------------------------------

Over-Subscription Privilege

The right to acquire during the Subscription  Period at the  Subscription  Price
one additional Share for each ten Rights held is hereinafter  referred to as the
"Primary  Subscription."  Shareholders on the Record Date who fully exercise all
Rights  issued to him or her (other than those  Rights which cannot be exercised
because they represent the right to acquire less than one Share) are entitled to
subscribe  for  Shares  which  were not  otherwise  subscribed  for by others on
Primary  Subscription  (the  "Over-Subscription  Privilege").  For  purposes  of
determining the maximum number of Shares a Shareholder  may acquire  pursuant to
the Offer,  broker-dealers  whose Shares are held of record by Cede & Co.,  Inc.
("Cede"),  nominee for Depository  Trust Company,  or by any other depository or
nominee  will be deemed to be the  holders of the Rights that are issued to Cede
or such  other  depository  or  nominee.  If enough  Shares are  available,  all
Shareholder  requests to buy Shares that were not bought by other Rights holders
will be honored in full. If the requests for Shares exceed the Shares available,
the available Shares will be allocated pro rata among those  shareholders on the
Record Date who  over-subscribe  based on the number of Rights originally issued
to them by the Fund. Shares acquired pursuant to the Over-Subscription Privilege
are  subject  to   allotment,   which  is  more  fully   discussed   under  "The
Offer--Over-Subscription Privilege."

Method for Exercising Rights

Except as  described  below,  subscription  certificates  evidencing  the Rights
("Subscription  Certificates")  will be sent to  shareholders on the Record Date
("Record Date  Shareholders")  or their  nominees.  If you wish to exercise your
Rights, you may do so in the following ways:

     (1) Complete and sign the Subscription Certificate. Mail it in the envelope
provided  or  deliver  it,  together  with  payment in full to  EquiServe  Trust
Company,   N.A.   ("Subscription   Agent")  at  the  address  indicated  on  the
Subscription Certificate. Your completed and signed Subscription Certificate and
payment must be received by the Expiration Date.

     (2) Contact your broker,  banker or trust  company,  which can arrange,  on
your  behalf,  to  guarantee  delivery  of payment  and  delivery  of a properly
completed  and  executed  Subscription  Certificate  pursuant  to  a  notice  of
guaranteed  delivery ("Notice of Guaranteed  Delivery") by the close of business
on the third  business day after the  Expiration  Date. A fee may be charged for
this  service.  The  Notice  of  Guaranteed  Delivery  must be  received  by the
Expiration Date.

Rights holders will have no right to rescind a purchase  after the  Subscription
Agent has received  payment.  See "The Offer - Method of Exercise of Rights" and
"The Offer - Payment for Shares."

Since the Expiration Date is prior to the Pricing Date,  Shareholders who choose
to exercise  their  Rights will not know at the time they  exercise  such Rights
what the purchase price for Shares  acquired  pursuant to such exercise will be.
Shareholders will have no right to rescind their  subscription  after receipt of
their payment for Shares by the Subscription Agent.  Subscription  payments will
be held by the  Subscription  Agent pending  completion of the processing of the
subscription. No interest thereon will be paid to subscribers.

The Rights are not transferable.  Therefore, only the underlying Shares, and not
the Rights,  will be admitted for trading on the NYSE. Since  fractional  Shares
will not be issued on exercise of Rights,  shareholders who receive, or are left
with,  fewer than ten Rights will be unable to exercise such Rights and will not
be entitled to receive any cash in lieu of unexercised rights.

Shareholders' inquiries about the Offer should be directed to their broker, bank
or trust company, or to:

             Georgeson Shareholder Communications Inc.
             (888) [          ]

Important Dates to Remember

Please note that the dates in the table below may change if the Offer is
extended.

<TABLE>
<CAPTION>
<S>                                                            <C>
- -------------------------------------------------------------- --------------------------------
Event                                                          Date
- -------------------------------------------------------------- --------------------------------
- -------------------------------------------------------------- --------------------------------
Record Date                                                    [          ], 2002
- -------------------------------------------------------------- --------------------------------
- -------------------------------------------------------------- --------------------------------
Subscription Period                                            [          ], 2002 through
                                                               [          ], 2002*
- -------------------------------------------------------------- --------------------------------
- -------------------------------------------------------------- --------------------------------
Expiration Date (Deadline for delivery of Subscription
Certificate together with payment of estimated Subscription
Price or for delivery of Notice of Guaranteed Delivery)        [          ], 2002

- -------------------------------------------------------------- --------------------------------
- -------------------------------------------------------------- --------------------------------
Pricing Date                                                   [          ], 2002
- -------------------------------------------------------------- --------------------------------
- -------------------------------------------------------------- --------------------------------
Deadline for payment of final Subscription Price pursuant to
Notice of Guaranteed Delivery                                  [          ], 2002
- -------------------------------------------------------------- --------------------------------
- -------------------------------------------------------------- --------------------------------
Confirmation to Registered Shareholders                        [          ], 2002
- -------------------------------------------------------------- --------------------------------
- -------------------------------------------------------------- --------------------------------
For Registered Shareholders' Subscriptions - deadline for
payment of unpaid balance if final Subscription Price is
higher than Estimated Subscription Price                       [          ], 2002
- -------------------------------------------------------------- --------------------------------
</TABLE>
___________________________
* Unless the Offer is extended.

Offering Fees and Expenses

      Offering expenses incurred by the Fund are estimated to be $[           ].

Restrictions on Foreign Shareholders

Record date  Shareholders  whose record  addresses are outside the United States
will receive  written notice of the Offer;  however,  Subscription  Certificates
will not be mailed to such shareholders.  The Rights to which those Subscription
Certificates  relate  will be held by the  subscription  agent for such  foreign
Record Date  Shareholders'  accounts until  instructions are received in writing
with payment to exercise the Rights. If no such instructions are received by the
Expiration Date, such Rights will expire. See "Subscription Agent."

Information about All-Star

All-Star  is  a  multi-managed  diversified,  closed-end  management  investment
company  registered under the Investment  Company Act of 1940, as amended ("1940
Act") that allocates its assets on an  approximately  equal basis among a number
of independent  investment management  organizations  (currently five in number)
each having a  different  investment  style.  See "The  Multi-Manager  Concept."
All-Star's investment objective is to seek total investment return, comprised of
long term  capital  appreciation  and  current  income.  It seeks its  objective
through  investment  primarily  (at  least  80% of  total  assets  under  normal
conditions)  in a  diversified  portfolio of equity  securities.  The portion of
All-Star's  portfolio  not invested in equity  securities  (not more than 20% of
total assets under normal  conditions) is generally invested in Short-Term Money
Market Instruments. See "Investment Objective, Policies and Risks."

All-Star  commenced  investment  operations in November,  1986. Its  outstanding
Shares of beneficial  interest are listed and traded on the NYSE (Symbol "USA").
The  average  weekly  trading  volume of the Shares on the NYSE  during the year
ended December 31, 2001 was [ ] Shares.  As of [ ], 2002,  All-Star's net assets
were $[ ], and [ ] Shares of All-Star were issued and outstanding.

Information about Liberty Asset Management Company

LAMCO provides selection,  evaluation and monitoring services to All-Star and is
responsible  for the provision of  administrative  services to the Fund, some of
which are delegated to LAMCO's affiliate,  Colonial Management Associates,  Inc.
("Colonial").  See  "Management  of  All-Star"  for the fees paid by the Fund to
LAMCO and by LAMCO to the  Portfolio  Managers.  Since the fees of LAMCO and the
Portfolio Managers are based on the average weekly net assets of All-Star, LAMCO
and the  Portfolio  Managers  will benefit from the Offer.  See  "Management  of
All-Star." As of December 31, 2001, LAMCO managed over $1.3 billion in assets.

LAMCO,  organized  in 1985,  is a direct  wholly  owned  subsidiary  of Columbia
Management Group, Inc. (formerly known as Fleet/Liberty  Holdings,  Inc.), which
is a direct wholly owned  subsidiary of Fleet National Bank, a national  banking
association,  which in turn is a direct wholly owned  subsidiary of  FleetBoston
Financial Corporation, a U.S. financial holding company. The principal executive
offices of LAMCO are  located at One  Financial  Center,  Boston,  Massachusetts
02111. The principal executive offices of Columbia Management Group, Inc., Fleet
National Bank and FleetBoston  Financial  Corporation are located at 100 Federal
Street, Boston, Massachusetts 02110.

Special Considerations and Risk Factors

     The following summarizes some of the matters that you should consider
before investing in All-Star through the Offer.

Dilution......................Shareholders  who  do  not  fully  exercise  their
     Rights should expect that they will, at the completion of the Offer,  own a
     smaller  proportional  interest  in the Fund than if they  exercised  their
     Rights.  As a result of the Offer you may experience an immediate  dilution
     of the  aggregate  net asset value of your  Shares,  which,  under  certain
     circumstances,  may be substantial.  This is because the Subscription Price
     per Share  and/or the net proceeds to the Fund for each new Share sold will
     be less than the Fund's net asset value per Share on the  Expiration  Date.
     Although it is not possible to state  precisely the amount of such dilution
     because it is not known at this time how many Shares will be subscribed for
     or what the net  asset  value or  market  price  per  Share  will be on the
     Pricing  Date,   All-Star  estimates  that  such  dilution  should  not  be
     substantial.  For example,  if  All-Star's  Shares are trading at a premium
     from their net asset value of 9.5% (the average  premium for the  six-month
     period ended January 31, 2001), and assuming all Rights are exercised,  the
     Subscription  Price would be 5% below All-Star's net asset value per Share,
     resulting in a reduction of such net asset value of  approximately $[ ] per
     Share,  or less than [ ]%. See "Special  Considerations  and Risk Factors -
     Dilution."

Distributions......................  All-Star  currently  has a policy of paying
     distributions  on its Shares  totaling  approximately  10% of its net asset
     value per year, payable in four quarterly  distributions of 2.5% of its net
     asset value at the close of the NYSE on the Friday prior to each  quarterly
     declaration  date.  These  fixed  distributions,  which are not  related to
     All-Star's net investment  income or net realized  capital gains or losses,
     will be treated as ordinary  dividend income up to the amount of All-Star's
     current and  accumulated  earnings and profits.  If, for any calendar year,
     the total distributions made under the 10% pay-out policy exceed All-Star's
     net investment  income and net realized  capital gains,  the excess will be
     treated as a tax-free  return of  capital  to each  shareholder  (up to the
     amount of the  Shareholder's  basis in his or her Shares) and thereafter as
     gain from the sale of Shares.  The amount  treated as a tax-free  return of
     capital will reduce the Shareholder's  adjusted basis in his or her Shares,
     thereby  increasing  his or  her  potential  gain  or  reducing  his or her
     potential loss on the subsequent sale of his or her Shares.

     All-Star may,  in the  discretion  of the  Board of  Trustees,  retain  for
     reinvestment,  and not  distribute,  net  long-term  capital  gains in
     excess of net  short-term  capital losses ("net capital gain") for any
     year to the extent  that its net  investment  income and net  realized
     gains exceed the minimum amount  required to be  distributed  for such
     year under the 10% pay-out  policy,  although  All-Star  reserves  the
     right to  distribute  such  excess.  Retained net capital gain will be
     taxed to both  All-Star  and the  Shareholders  as  long-term  capital
     gains; however, each Shareholder will be able to claim a proportionate
     share of the federal  income tax paid by All-Star as a credit  against
     his or her own federal  income tax  liability  and will be entitled to
     increase the adjusted tax basis in his or her Shares by the difference
     between the amount taxed and the credit. See "Distributions; Automatic
     Dividend Reinvestment and Cash Purchase Plan."

     Closed-end fund  discounts...........................Shares  of  closed-end
          funds  frequently  trade at a market price that is less than the value
          of the net assets  attributable to those shares.  The possibility that
          Shares of All-Star  will trade at a discount from net asset value is a
          risk  separate and distinct  from the risk that  All-Star's  net asset
          value will  decrease.  The risk of  purchasing  shares of a closed-end
          fund that might trade at a discount is more  pronounced  for investors
          who wish to sell their  shares in a  relatively  short  period of time
          because,  for those investors,  realization of a gain or loss on their
          investments  is likely to be more  dependent  upon the  existence of a
          premium or discount than upon portfolio performance.  See "Share Price
          Data."

     Anti-takeover  Provisions...........................All-Star's
          Declaration of Trust and By-Laws have provisions (commonly referred to
          as "anti-takeover  provisions")  which are intended to have the effect
          of  limiting  the  ability  of other  entities  or  persons to acquire
          control of All-Star, to cause it to engage in certain transactions, or
          to modify its  structure.  For instance,  the  affirmative  vote of 75
          percent of the Shares of the Fund is required to authorize  All-Star's
          conversion from a closed-end to an open-end investment company, unless
          such  conversion is  recommended by All-Star's  Board of Trustees,  in
          which event such  conversion  would only require the majority  vote of
          All-Star's  Shareholders,  as  defined  in the  1940  Act.  A  similar
          Shareholder  vote  is  required  to  authorize  a  merger,  sale  of a
          substantial  part of the assets or similar  transactions  with persons
          beneficially owning five percent or more of All-Star's Shares,  unless
          approved by All-Star's  Board of Trustees  under  certain  conditions.
          These  provisions  cannot be amended without a similar  super-majority
          vote. In addition,  All-Star's Board of Trustees is divided into three
          classes, each of which has a term of three years and only one of which
          is elected at each annual meeting of shareholders. See "Description of
          Shares--Anti-takeover  Provisions  of the  Declaration  of  Trust  and
          By-Laws;  Super-majority  Vote  Requirement for Conversion to Open-End
          Status."

     Repurchase........................You  will  be  free  to  dispose  of your
          Shares on the NYSE or other  markets  on which the  Shares  may trade,
          but,  because the Fund is a closed-end fund, you do not have the right
          to redeem your Shares.

You should carefully  consider your ability to assume the foregoing risks before
making an  investment  in the Fund.  An  investment in Shares of the Fund is not
appropriate for all investors.

<PAGE>

                                        EXPENSES

Shareholder Transaction Expenses

     These are the expenses  that an investor  incurs when buying  Shares of
All-Star,  whether in this Offer,  in the  open-market  or through All-Star's
Automatic Dividend Reinvestment and Cash Purchase Plan, as amended ("Plan").

 Sales Load ..........................................   None(l)

Automatic Dividend Reinvestment
    and Cash Purchase Plan Fees ........  $1.25 per voluntary cash investment

(1) No sales load or  commission  will be payable in  connection  with
     this  Offer.  Purchases  of Shares  through  brokers  in  secondary  market
     transactions are subject to brokers' commissions and charges.

Annual Expenses (as a percentage of net assets attributable to beneficial
                  interests)

 Management and Administrative Fees .................................. 0.90%
 Other Expenses....................................................... 0.13%
 Total Annual Expenses ............................................... 1.03%

Example: You would pay the following expenses on an investment
(at net asset value) of $1,000, assuming a 5% annual return.

          1 Year            3 Years           5 Years          10 Years
          ------            -------           -------          ----------
            $11               $33               $57              $126

     These figures are intended to illustrate  the effect of All-Star's
expenses,  but are not meant to predict its future returns and expenses, which
may be higher or lower than those shown.


The purpose of the above  tables is to assist  investors  in  understanding  the
various  costs and expenses  that an investor in All-Star  will bear directly or
indirectly.  The numbers shown under the Annual  Expenses table are  projections
based on All-Star's actual expenses for the year ended December 31, 2001, and on
its  projected  net  assets  assuming  the Offer is fully  subscribed  for at an
assumed  Subscription  Price of $[ ] per Share.  See "Financial  Highlights" for
All-Star's  actual  ratio of  expenses  to average net assets for the year ended
December 31, 2001.


                         FINANCIAL HIGHLIGHTS

The financial  highlights  table is intended to help you  understand  the Fund's
financial  performance.  Information  is shown for the  Fund's  last ten  fiscal
years.  Certain information reflects financial results from a single Fund Share.
The  information  for the fiscal years ended  December 31, 2000 and December 31,
2001 has been audited by [ ], independent accountants.  The information included
in the Fund's financial statements for periods prior to 1999 had been audited by
[ ], another independent auditor,  whose report expressed an unqualified opinion
on those  financial  statements  and  financial  highlights.  The  report of the
independent accountants, together with the financial statements of the Fund, are
included in the Fund's  December 31, 2001 Annual Report and are  incorporated by
reference into the Statement of Additional Information (see cover page).
<TABLE>
<CAPTION>

                                                                        For the Year Ended December 31,

                                                              2001       2000        1999       1998        1997
<S>                                                         <C>         <C>        <C>         <C>        <C>
PER SHARE OPERATING PERFORMANCE:
                                                            $13.61      $14.02     $14.22      $13.32     $11.95
Net asset value at beginning of year

Income from Investment Operations:
                                                              0.03        0.05       0.05        0.05       0.05
         Net investment income
         Net realized and unrealized gain                    (1.79)       0.96       1.22        2.35       3.01(a)
         (loss) on investments
                                                              ----       ----        ----       ----       (0.36)
Provision for federal income tax
                                                             (1.76)       1.01       1.27        2.40       2.70
Total from Investment Operations

Less Distributions from:
                                                             (0.03)     (0.06)      (0.05)     (0.05)      (0.05)
         Net investment income
                                                             (1.17)      (1.36)     (1.34)      (1.35)     (1.28)
         Realized capital gains
                                                              ----       ----        ----       ----        ----
         Return of capital
                                                             (1.20)      (1.42)     (1.39)      (1.40)     (1.33)
Total Distributions
                                                              ----       ----        ----       (0.10)      ----
Change due to rights offering (b)
Impact of Shares issued in dividend reinvestment (c)          ----       ----       (0.08)      ----        ----
Total Distributions, Reinvestments and Rights Offering       (1.20)      (1.42)     (1.47)      (1.50)     (1.33)
                                                             $10.65     $13.61      $14.02     $14.22      $13.32
Net asset value at end of year
                                                            $11.09      $12.375    $11.063     $12.938    $13.313
Market price at end of year

TOTAL INVESTMENT RETURN FOR SHAREHOLDERS: (d)
                                                            (12.7)%       8.8%      10.2%       19.8%      26.6%
Based on net asset value
                                                              0.0%       25.4%      (4.4)%       9.1%      34.4%
Based on market price

RATIOS AND SUPPLEMENTAL DATA:
                                                             $1,133     $1,376      $1,396     $1,351      $1,150
Net assets at end of year (millions)
                                                              1.03%       0.96%      0.97%       1.00%      1.01%
Ratio of expenses to average net assets

Ratio of net investment income (loss) to average net assets   0.27%       0.37%      0.37%       0.39%      0.38%

Portfolio turnover rate                                         64%            83%      90%       76%        99%
</TABLE>




(a)   Before provision for federal income tax
(b)   Effect of Fund's rights offering for Shares at a price below net asset
      value.
(c)   Effect of payment of a portion of distributions in newly issued Shares
      valued at a discount from net asset value.
(d)   Calculated assuming all distributions reinvested at the actual
      reinvestment price and all primary rights exercised.

<TABLE>
<CAPTION>
                                                                       For the Year Ended December 31,


                                                              1996       1995        1994       1993        1992
<S>                                                         <C>           <C>       <C>         <C>        <C>
PER SHARE OPERATING PERFORMANCE:

                                                            $11.03        $9.26     $10.40      $10.78     $11.20
Net asset value at beginning of year

Income from Investment Operations:
                                                              0.08         0.10       0.11        0.12       0.16
         Net investment income (loss)
         Net realized and unrealized gains                    2.15(a)      2.71      (0.20)       0.78(a)    0.54
                 (losses) on investments
                                                             (0.13)      ----        ----        (0.18)     ----
Provision for federal income tax
                                                              2.10         2.81      (0.09)       0.72       0.70
Total from Investment Operations

Less Distributions from:
                                                             (0.08)       (0.10)     (0.12)      (0.12)     (0.18)
         Net investment income
                                                             (1.10)       (0.94)     (0.52)      (0.58)     (0.66)
         Realized capital gain
                                                              ----       ----       (0.36)     (0.37)      (0.23)
         Return of capital
                                                             (1.18)       (1.04)     (1.00)      (1.07)     (1.07)
Total Distributions
                                                               ----      ----        (0.05)    (0.03)      (0.05)
Change due to rights offering (b)
Impact of Shares issued in dividend                           ----       ----        ----       ----        ----
         reinvestment (c)
Total Distributions, Reinvestments and Rights                (1.18)       (1.04)     (1.05)      (1.10)     (1.12)
         Offering
                                                             $11.95      $11.03      $9.26      $10.40     $10.78
Net asset value at end of year
                                                            $11.250      $10.875     $8.500     $11.125    $11.125
Market price at end of year

TOTAL INVESTMENT RETURN FOR SHAREHOLDERS: (d)
                                                             21.7%        31.8       (0.8)%       8.8%       6.9 %
Based on net asset value
                                                             16.2%        41.4      (14.9)%      12.7%      14.9%
Based on market price

RATIOS AND SUPPLEMENTAL DATA:
                                                              $988       $872        $710       $725        $665
Net assets at end of year (millions)
                                                              1.03%        1.06%      1.07%       1.08%      1.08%
Ratio of expenses to average net assets

Ratio of net investment income (loss) to average net assets   0.73%        0.92%      1.16%       1.08%      1.44%

Portfolio turnover rate                                         70%         54%        44%         72%        57%

</TABLE>


(a)      Before provision for federal income tax
(b)      Effect of Fund's rights offering for Shares at a price below net
         asset value.
(c)      Effect of payment of a portion of distributions in newly issued Shares
         valued at a discount from net asset value.
(d)      Calculated assuming all distributions reinvested at the actual
         reinvestment price and all primary rights exercised.


                                                           SHARE PRICE DATA

Trading in All-Star's  Shares on the NYSE commenced on October 24, 1986. For the
two years ended  December 31, 2001, the high and low sales prices for All-Star's
Shares, as reported in the consolidated  transaction  reporting system,  and the
highest  discount from or premium to net asset value per Share and the net asset
value on the day or days  when the  Shares  traded  at such  high and low  sales
prices, were as follows:

<TABLE>
<CAPTION>

                                                                 Discount from                                  Discount
                                                                 or Premium to                                  from or
                                                                 Net Asset                                      Premium to
                                   High Sales     Net Asset      Value           Low Sales      Net Asset       Net Asset
2000                               Price          Value                          Price          Value           Value
<S>                                <C>            <C>            <C>             <C>            <C>             <C>
1st Quarter.........               $11.75         $14.52         -19.1%          $9.75          $12.98          -24.9%

2nd Quarter.........               $12.75         $14.17         -10.0%          $10.313        $14.10          -26.8%

3rd Quarter.........               $13.25         $14.84         -10.7%          $12.313        $14.31          -13.9%

4th Quarter.........               $13.25         $14.23           -6.9%         $11.313        $13.42          -15.7%


2001
1st  Quarter .......               $13.57         $13.80          -1.7%          $11.50         $11.07          3.9%

2nd  Quarter........               $13.55         $12.78           6.0%          $11.50         $10.82          6.3%

3rd Quarter........                $13.25         $12.05           9.9%          $8.60          $8.83           -2.6%

4th Quarter........                $11.85         $10.33         14.7%           $10.40         $9.43           10.2%

</TABLE>


All-Star's  Shares have traded in certain  periods at a discount  from their net
asset value.  Certain features of and steps taken by All-Star may have tended to
reduce the  discount  from net asset value at which its Shares  might  otherwise
have traded,  although  All-Star is not able to determine  what effect,  if any,
these  various  features  and  steps  may  have  had.   All-Star's  current  10%
distribution  policy (see  "Distributions;  Automatic Dividend  Reinvestment and
Cash Purchase  Plan-10%  Distribution  Policy" below),  begun in July, 1988, may
have  contributed to this effect.  This trend may also have resulted in whole or
in part from  other  factors,  such as the  Fund's  investment  performance  and
increased  attention  directed  to All-Star by  securities  analysts  and market
letters.

The net  asset  value of a Share  of  All-Star  on [ ],  2002 was $[ ]. The last
reported sale price of an All-Star  Share on that day was $[ ],  representing  a
[discount from/premium to] net asset value of [ ]%.

                                                        INVESTMENT PERFORMANCE

The table below shows two measures of  All-Star's  return to  investors  for the
one,  five,  ten and fifteen year  periods  through  December  31,  2001.  No. 1
("All-Star NAV") shows All-Star's investment performance based on a valuation of
its Shares at net asset value ("NAV"). No. 2 ("All-Star Price") shows All-Star's
investment  performance  based on the market price of  All-Star's  Shares.  Both
measures assume reinvestment of all of the Fund's dividends and distributions in
additional  Shares pursuant to All-Star's  Automatic  Dividend  Reinvestment and
Cash Purchase Plan (see "Distributions; Automatic Dividend Reinvestment and Cash
Purchase  Plan"  below),  and full  exercise of primary  subscription  rights in
All-Star's 1992, 1993, 1994 and 1998 rights offerings.

The Lipper  Large-Cap  Core  Mutual Fund  Average has been  included so that the
Fund's results may be compared with an unweighted average of the total return of
open-end  mutual funds  classified as large-cap  core funds (i.e.,  mutual funds
having investment  objectives and policies  comparable to All-Star) published by
Lipper,  Inc. The Lipper Large-Cap Core Average  information  reflects the total
return of the  mutual  funds  included  in the  average,  in each case  assuming
reinvestment of dividends and distributions. The record of the S&P 500 Index has
also been included so that  All-Star's  results may be compared with those of an
unmanaged group of securities  widely regarded by investors as representative of
the  stock   market   in   general.   The  S&P  500  Index  is  a  broad   based
capitalization-weighted  index which reflects the total return of the securities
included in the index.

<TABLE>
<CAPTION>

                                               No. 1                 No. 2            Lipper Large-Cap Core          S&P 500
                                            All-Star NAV        All-Star Price         Mutual Fund Average            Index
<S>                                            <C>                   <C>                      <C>                    <C>
1 Year beginning January 1, 2001               -12.7%                0.0%                     -13.8%                 -11.9%
5 Years beginning January 1, 1996               9.7%                 11.9%                     8.2%                   10.7%
10 Years beginning January 1, 1991             11.4%                 12.3%                    11.0%                   12.9%
15 Years beginning January 1, 1986             13.0%                 12.9%                    11.9%                   13.7%

</TABLE>

The above results represent  All-Star's past performance and are not intended as
a prediction of its future  performance.  The investment return, net asset value
and market value of All-Star's  Shares will fluctuate,  so that such Shares when
sold may be worth more or less than their original cost.

                                         THE OFFER

Terms of the Offer

All-Star  is  issuing  to Record  Date  Shareholders  nontransferable  Rights to
subscribe for the Shares,  without par value, of the Fund's beneficial interest.
Each such  shareholder  is being  issued one Right for each Share of  beneficial
interest  owned on the Record Date.  The Rights entitle the holder to acquire on
Primary  Subscription  at the  Subscription  Price one Share for each ten Rights
held. No Rights will be issued for fractional Shares. Accordingly, Shares may be
purchased only pursuant to the exercise of Rights in integral  multiples of ten.
Rights may be  exercised  at any time  during  the  Subscription  Period,  which
commences on [ ], 2002 and ends at 5:00 p.m.,  New York City time, on [ ], 2002,
the Expiration Date.

In addition,  any Shareholder who fully exercises all Rights initially issued to
him or her in the Primary  Subscription (other than those Rights which cannot be
exercised  because they  represent  the right to acquire less than one Share) is
entitled to subscribe  for Shares  which were not  otherwise  subscribed  for by
others on Primary Subscription. For purposes of determining the number of Shares
a Shareholder may acquire pursuant to the Offer, broker-dealers whose Shares are
held of record on the Record Date by Cede or by any other  depository or nominee
will be deemed to be the  holders of the Rights  that are issued to Cede or such
other  depository or nominee on their behalf.  Shares  acquired  pursuant to the
Over-Subscription  Privilege  are  subject  to  allotment,  which is more  fully
discussed below under "Over-Subscription Privilege."

The Rights are not transferable.  Therefore, only the underlying Shares, and not
the Rights,  will be admitted for trading on the NYSE. Since  fractional  Shares
will not be issued,  shareholders who receive,  or who are left with, fewer than
ten Rights  will be unable to  exercise  such Rights and will not be entitled to
receive any cash in lieu of such fractional Shares.

The Rights will be evidenced by Subscription  Certificates  which will be mailed
to  Record  Date   Shareholders.   Rights  may  be  exercised  by  completing  a
Subscription  Certificate  and delivering it,  together with payment by means of
(i) a check or money  order,  or (ii) a Notice of  Guaranteed  Delivery,  to the
Subscription  Agent during the Subscription  Period.  The method by which Rights
may be  exercised  and the Shares paid for is set forth  below under  "Method of
Exercise of Rights" and "Payment for Shares."

Purpose of the Offer

The Board of Trustees of All-Star  has  determined  that it would be in the best
interests  of All-Star and its  Shareholders  to increase the assets of All-Star
available for investment  thereby permitting the Fund to be in a better position
to more fully take  advantage of investment  opportunities  that may arise,  and
that the potential  benefits of the Offer to All-Star and its shareholders  will
outweigh the dilution to  shareholders  who do not fully  exercise their Rights.
The  proceeds of the Offer will  enable  All-Star's  Portfolio  Managers to take
advantage of perceived investment  opportunities without having to sell existing
portfolio  holdings which they otherwise would retain. The Offer seeks to reward
investors by giving existing shareholders the opportunity to purchase additional
Shares at a price below  market  and/or net asset  value and  without  brokerage
commissions.  In addition,  the Offer will enhance the likelihood  that All-Star
will continue to have sufficient assets remaining after the distributions called
for by its current 10%  distribution  policy to permit the Fund to maintain  the
current ratio of its fixed expenses to its net assets.

All-Star's  Fund  Manager and  Portfolio  Managers  will  benefit from the Offer
because their fees are based on the average  weekly net assets of All-Star.  See
"Management  of All-Star."  It is not possible to state  precisely the amount of
additional compensation they will receive as a result of the Offer because it is
not known how many Shares will be subscribed for and because the net proceeds of
the  Offer  will be  invested  in  additional  portfolio  securities  that  will
fluctuate in value. One of All-Star's  Trustees who voted to authorize the Offer
is an  "interested  person,"  within the meaning of the 1940 Act, of LAMCO,  and
therefore could benefit  indirectly from the Offer.  The other four Trustees are
not "interested persons" of All-Star or LAMCO.

All-Star  may, in the future and at its  discretion,  choose to make  additional
rights offerings from time to time for a number of Shares and on terms which may
or may not be similar to the Offer. Any such future rights offering will be made
in accordance with the 1940 Act. In 1992,  All-Star  completed a rights offering
to shareholders of 5,464,168 additional Shares at a subscription price of $10.05
per Share,  for  proceeds to the Fund after  expenses of  $54,683,782.  In 1993,
All-Star  completed  a second  rights  offering  to  shareholders  of  4,227,570
additional  Shares at a subscription  price of $10.41 per Share, for proceeds to
the Fund after  expenses of  $43,759,004.  In 1994,  All-Star  completed a third
rights offering to shareholders of 4,704,931 additional Shares at a subscription
price  of  $9.14  per  Share,  for  proceeds  to  the  Fund  after  expenses  of
$42,793,069.   In  1998,   All-Star   completed  a  fourth  rights  offering  to
shareholders of 4,318,134  additional  Shares at a subscription  price of $12.83
per Share,  for  proceeds to the Fund after  expenses of  $55,166,659.  All four
rights offerings were oversubscribed. Under the laws of Massachusetts, the state
in which the Fund is  organized,  the Board of Trustees is authorized to approve
rights  offerings  without  obtaining  shareholder  approval.  The  staff of the
Securities and Exchange  Commission  ("SEC") has interpreted the 1940 Act as not
requiring  shareholder  approval of a rights  offering at a price below the then
current net asset value so long as certain  conditions are met, including a good
faith  determination  by the fund's board of trustees that such  offering  would
result in a net benefit to existing shareholders.

Over-Subscription Privilege

If all of the  Rights  initially  issued  in the  Primary  Subscription  are not
exercised,  any Shares for which  Subscriptions  have not been received ("Excess
Shares") will be offered, by means of the Over-Subscription Privilege, to Record
Date Shareholders who have exercised all the Rights initially issued to them and
who wish to acquire  more than the number of Shares for which the Rights  issued
to them are  exercisable.  Record Date  Shareholders who exercise all the Rights
initially  issued  to  them  will  have  the  opportunity  to  indicate  on  the
Subscription Certificate how many Shares they are willing to acquire pursuant to
the  Over-Subscription  Privilege.  If  sufficient  Excess  Shares  remain,  all
over-subscriptions  will be honored in full. If sufficient Excess Shares are not
available to honor all  over-subscriptions,  the available Excess Shares will be
allocated  (subject  to  elimination  of  fractional  Shares)  among  those  who
over-subscribe  based on the number of Rights  originally  issued to them by the
Fund.  The  allocation  process may involve a series of  allocations in order to
assure  that the total  number of Shares  available  for  over-subscriptions  is
distributed on a pro rata basis.

The method by which Excess Shares will be distributed and allocated  pursuant to
the Over-Subscription  Privilege is as follows.  Excess Shares will be available
for purchase pursuant to the Over-Subscription Privilege only to the extent that
the maximum  number of Shares is not  subscribed for through the exercise of the
Primary  Subscription  by the  Expiration  Date.  If the  Excess  Shares are not
sufficient  to  satisfy  all  subscriptions  pursuant  to the  Over-Subscription
Privilege,  the  Excess  Shares  will be  allocated  pro  rata  (subject  to the
elimination of fractional  Shares) among those holders of Rights  exercising the
Over-Subscription  Privilege,  in  proportion,  not  to  the  number  of  Shares
requested  pursuant  to the  Over-Subscription  Privilege,  but to the number of
Shares  held on the  Record  Date;  provided,  however,  that if this  pro  rata
allocation  results in any holder  being  allocated  a greater  number of Excess
Shares than the holder  subscribed for pursuant to the exercise of such holder's
Over-Subscription Privilege, then such holder will be allocated only such number
of Excess Shares as such holder  subscribed for and the remaining  Excess Shares
will  be  allocated  among  all  other  holders   exercising   Over-Subscription
Privileges.  The  formula  to be used in  allocating  the  Excess  Shares  is as
follows:

              Holder's Record Date Position
              ------------------------------
              Total Record Date Position       x   Excess Shares
              of all Oversubscribers               Remaining

The  allocation  process may involve a series of  allocations in order to assure
that the total number of Shares available for  Over-Subscription  is distributed
on a pro rata  basis.  The Fund will not offer or sell any Shares  which are not
subscribed  for  under  the  Primary   Subscription  or  the   Over-Subscription
Privilege.


The Subscription Price

The  Subscription  Price for the Shares to be issued pursuant to the Rights will
be 95% of the lower of (i) the last  reported  sale price of a Share of All-Star
on the NYSE on [ ], 2002,  the  Pricing  Date,  or (ii) the net asset value of a
Share of All-Star on the Pricing Date.

All-Star  announced  the terms of the Offer before the opening of trading on the
NYSE on  February  13,  2002.  The net asset  value per Share of All-Star at the
close of  business  on  February  12, 2002 and on [ ], 2002 was $10.19 and $[ ],
respectively,  and the last  reported sale price of a Share on the NYSE on those
dates  was  $11.06  and  $[  ],  respectively,  representing  a [ ]%  and a [ ]%
[discount/premium],  respectively,  in relation to the net asset value per Share
at the close of business on these dates.

Expiration of the Offer

The Offer will  expire at 5:00 p.m.,  New York City time,  on [ ], 2002.  Rights
will expire on the Expiration  Date and thereafter may not be exercised,  unless
the Offer is extended.  Since the Expiration  Date is prior to the Pricing Date,
shareholders who decide to acquire Shares on Primary Subscription or pursuant to
the  Over-Subscription  Privilege  will not know,  when they make such decision,
what the purchase price for such Shares will be.

Any  extension,  termination,  or  amendment  of the Offer will be  followed  as
promptly as practicable by announcement  thereof,  such announcement in the case
of an extension to be issued no later than 9:00 a.m., New York City time, on the
next business day following the previously  scheduled  Expiration Date. The Fund
will not,  unless  otherwise  required by law,  have any  obligation to publish,
advertise, or otherwise communicate any such announcement other than by making a
release to the Dow Jones News Service or such other means of announcement as the
Fund deems appropriate.

Subscription Agent

The  Subscription  Agent is  EquiServe  Trust  Company,  N.A.,  P.O.  Box 43025,
Providence,  RI  02940-3025.  EquiServe  Trust  Company  N.A. is also the Fund's
dividend paying agent, transfer agent and registrar. The Subscription Agent will
receive from All-Star a fee estimated to be no more than $[ ] and  reimbursement
for its out-of-pocket expenses related to the Offer. Inquiries by all holders of
Rights  should  be  directed  to  P.O.  Box  43025,  Providence,  RI  02940-3025
(telephone (800) [ ]); holders may also consult their brokers or nominees.

Information Agent

Any questions or requests for assistance  regarding the Offer may be directed to
the Information Agent at its telephone number and address listed below:

          Georgeson Shareholder Communications Inc.
          111 Commerce Road
          Carlstadt, New Jersey 07072-2586

          Call Toll Free (888) [          ]

The Information  Agent will receive a fee estimated at  approximately  $[ ] plus
reimbursement for its out-of-pocket expenses.

Method of Exercise of Rights

Rights may be  exercised  by  filling in and  signing  the  reverse  side of the
Subscription  Certificate and mailing it in the envelope provided,  or otherwise
delivering the completed and signed Subscription Certificate to the Subscription
Agent,  together with payment for the Shares as described  below under  "Payment
for Shares." Rights may also be exercised through a Rights holder's broker,  who
may charge such Rights holder a servicing fee in connection  with such exercise.
Fractional Shares will not be issued, and Rights holders who receive, or who are
left with, fewer than ten Rights will not be able to exercise such Rights.

Completed Subscription Certificates and related payments must be received by the
Subscription  Agent prior to 5:00 p.m.,  New York City time,  on the  Expiration
Date (unless payment is effected by means of a Notice of Guaranteed  Delivery as
described  below under "Payment for Shares") at the offices of the  Subscription
Agent at one of the addresses set forth below.

The  Subscription  Certificate  and payment  should be sent to  EQUISERVE  TRUST
COMPANY, N.A. by one of the following methods:

<TABLE>
<CAPTION>

Subscription Certificate
Delivery Method                                           Address
- ------------------------                                  -------------

<S>                                                       <C>
If By Mail:                                               EquiServe
                                                          Att: Corporate Actions
                                                          P.O. Box 43025
                                                          Providence, RI  02940-3025

If By Hand:                                               Securities Transfer and Reporting Services, Inc.
                                                          c/o EquiServe
                                                          100 Williams St. Galleria
                                                          New York, NY  10038

If By Overnight Courier or                                EquiServe
Express Mail:                                             Attn: Corporate Actions
                                                          40 Campanelli Drive
                                                          Braintree, MA 02184

By Broker-Dealer or                                       Shareholders whose Shares are held in a brokerage,
other Nominee:                                            bank or trust account may contact their broker or
(Notice of Guaranteed                                     other nominee and instruct them to submit a Notice
Delivery)                                                 of Guaranteed Delivery and payment on their
                                                          behalf.

</TABLE>

Delivery by any method or to any address  not listed  above will not  constitute
good delivery.

All questions as to the validity,  form, eligibility (including times of receipt
and  matters   pertaining  to  beneficial   ownership)  and  the  acceptance  of
subscription  forms and the  Subscription  Price will be determined by All-Star,
which  determinations will be final and binding. No alternative,  conditional or
contingent subscriptions will be accepted.  All-Star reserves the absolute right
to reject any or all subscriptions  not properly  submitted or the acceptance of
which would,  in the opinion of the Fund's counsel,  be unlawful.  All-Star also
reserves the right to waive any  irregularities  or  conditions,  and the Fund's
interpretations  of the terms  and  conditions  of the Offer  shall be final and
binding.  Any  irregularities  in connection  with  subscriptions  must be cured
within such time, if any, as the Fund shall  determine  unless  waived.  Neither
All-Star nor the Subscription Agent shall be under any duty to give notification
of defects in such subscriptions or incur any liability for failure to give such
notification.  Subscriptions  will not be deemed to have  been made  until  such
irregularities have been cured or waived.

Payment for Shares

Holders of Rights who subscribe for Shares on Primary  Subscription  or pursuant
to the  Over-Subscription  Privilege may choose between the following methods of
payment:

(1) A subscription will be accepted by the Subscription  Agent if, prior to 5:00
p.m., New York City time, on the Expiration Date, the  Subscription  Agent shall
have received a Notice of Guaranteed Delivery, by facsimile or otherwise, from a
bank or trust company or a NYSE or National  Association  of Securities  Dealers
member firm, guaranteeing delivery of (a) payment of the full Subscription Price
for the Shares subscribed for on Primary  Subscription and any additional Shares
subscribed  for pursuant to the  Over-Subscription  Privilege and (b) a properly
completed and executed Subscription Certificate. The Subscription Agent will not
honor a Notice of  Guaranteed  Delivery  if a properly  completed  and  executed
Subscription  Certificate and full payment for the Shares is not received by the
Subscription  Agent by [ ],  2002.  The  Notice of  Guaranteed  Delivery  may be
delivered  to  the  Subscription  Agent  in  the  same  manner  as  Subscription
Certificates  at the addresses  set forth above,  or may be  transmitted  to the
Subscription  Agent by facsimile  transmission  (telecopy number (781) 575-4826;
telephone number to confirm receipt (781) 575-4816).

(2)  Alternatively,  a holder  of Rights  can,  together  with the  Subscription
Certificate,  send payment for the Shares acquired on Primary  Subscription  and
any additional Shares subscribed for pursuant to the Over-Subscription Privilege
to the Subscription Agent based on an estimated  subscription price of $[ ] per
Share. To be accepted, such payment, together with the Subscription Certificate,
must be received  by the  Subscription  Agent prior to 5:00 p.m.,  New York City
time, on the Expiration Date. The  Subscription  Agent will not accept cash as a
means of payment for Shares.  Except as  otherwise  set forth  below,  a payment
pursuant to this method must be in United States dollars by money order or check
drawn on a bank located in the continental United States, must be payable to the
Liberty  All-Star  Equity  Fund,  and must  accompany  an executed  Subscription
Certificate to be accepted.

Within ten business days following the Expiration Date (the "Confirmation  Date"
), a confirmation  will be sent by the  Subscription  Agent to each  shareholder
exercising his or her Rights (or, if the All-Star  Shares on the Record Date are
held  by  Cede or any  other  depository  or  nominee,  to  Cede  or such  other
depository or nominee),  showing (i) the number of Shares  acquired  pursuant to
the Primary  Subscription;  (ii) the number of Shares, if any, acquired pursuant
to the Over-Subscription Privilege; (iii) the per Share and total purchase price
for the Shares;  and (iv) any additional  amount payable by such  shareholder to
All-Star or any excess to be refunded by All-Star to such  shareholder,  in each
case based on the  Subscription  Price as determined  on the Pricing  Date.  Any
additional  payment  required  from  a  shareholder  must  be  received  by  the
Subscription Agent prior to 5:00 p.m., New York City time, on [ ], 2002, and any
excess payment to be refunded by All-Star to such  shareholder will be mailed by
the Subscription Agent with the confirmation. All payments by a shareholder must
be in United  States  dollars by money order or check drawn on a bank located in
the United  States of America and be payable to Liberty  All-Star  Equity  Fund.
Such payments will be held by the Subscription  Agent pending  completion of the
processing of the subscription,  and will then be paid to All-Star. Any interest
earned on such  amounts  will  accrue to  All-Star  and none will be paid to the
subscriber.

Whichever of the above two methods of payment is used,  issuance and delivery of
the Shares subscribed for are subject to collection of checks and actual payment
pursuant to any Notice of Guaranteed Delivery.

Rights holders will have no right to rescind their subscription after receipt of
their payment for Shares by the Subscription Agent.

If a holder of Rights who acquires Shares  pursuant to the Primary  Subscription
or the  Over-Subscription  Privilege  does not make  payment of any amounts due,
All-Star  reserves the right to take any or all of the  following  actions:  (i)
find other purchasers for such subscribed and unpaid for Shares;  (ii) apply any
payment  actually  received by it toward the purchase of the greatest  number of
whole Shares which could be acquired by such holder upon exercise of the Primary
Subscription or the Over-Subscription  Privilege;  (iii) sell in the open market
all or a portion of the Shares  purchased by the holder,  and apply the proceeds
to the amounts  owed;  and (iv) exercise any and all other rights or remedies to
which it may be entitled,  including,  without limitation,  the right to set off
against payments  actually received by it with respect to such subscribed Shares
to enforce the relevant guaranty of payment or monetary damages.

All-Star  shareholders  whose Shares are held by a  broker-dealer,  bank,  trust
company or other nominee should contact the nominee to exercise their Rights and
request  the  nominee  to  exercise  their  Rights  in  accordance   with  their
instructions.

Brokers,  banks,  trust  companies,  depositories  and other  nominees  who hold
All-Star  Shares  for  the  account  of  others  should  notify  the  respective
beneficial  owners  of such  Shares  as  soon  as  possible  to  ascertain  such
beneficial  owners'  intentions  and to  obtain  instructions  with  respect  to
exercising the Rights.  If the beneficial owner so instructs,  the record holder
of such Right should complete  Subscription  Certificates and submit them to the
Subscription Agent with the proper payment.

The  instructions  contained  on the  Subscription  Certificate  should  be read
carefully  and  followed in detail.  Do Not Send  Subscription  Certificates  to
All-Star.  (They should be sent to EquiServe  Trust  Company,  N.A. as indicated
above).

The  method  of  delivery  of  Subscription  Certificates  and  payment  of  the
Subscription Price to the Subscription Agent will be at the election and risk of
the Rights holders,  but if sent by mail it is recommended that the certificates
and payments be sent by registered mail,  properly insured,  with return receipt
requested, and that a sufficient number of days be allowed to ensure delivery to
the  Subscription  Agent and clearance of payment  prior to 5:00 p.m.,  New York
City time, on the Expiration Date. Because uncertified  personal checks may take
at least five business days to clear,  you are strongly urged to pay, or arrange
for payment,  by means of a certified or cashier's check or money order.  Shares
will not be delivered until checks have cleared.

Delivery of Stock Certificates

Participants in All-Star's  Automatic  Dividend  Reinvestment  and Cash Purchase
Plan who exercise the Rights issued on the Shares held in their  accounts in the
Plan will have their Shares acquired on Primary Subscription and pursuant to the
Over-Subscription   Privilege   credited  to  their   shareholder   distribution
reinvestment accounts in the Plan.  Shareholders whose Shares are held of record
by Cede  or by any  other  depository  or  nominee  on  their  behalf  or  their
broker-dealers'  behalf will have their Shares acquired on Primary  Subscription
and pursuant to the Over-Subscription  Privilege credited to the account of Cede
or such other  depository  or nominee.  With respect to all other  shareholders,
stock certificates for all Shares acquired on Primary  Subscription and pursuant
to  the   Over-Subscription   Privilege  will  be  mailed,   together  with  the
confirmation  and  refund  of the  amount,  if any,  paid in excess of the final
Subscription Price, on or about [ ], 2002 if the estimated Subscription Price is
equal to or in excess  of the final  Subscription  Price.  If the  shareholder's
confirmation  shows  that an  additional  amount  is  payable  due to the  final
Subscription  Price  exceeding  the  estimated  Subscription  Price,  the  stock
certificates will be mailed on or about [ ], 2002, provided that such additional
amount has been paid and  payment  for the Shares  subscribed  for has  cleared,
which  clearance  may  take up to five  days  from the  date of  receipt  of the
payment.  If such payment does not clear within five business days from the date
of receipt,  All-Star may exercise its rights in the event of  nonpayment  under
"Payment for Shares" above.

Record Date  Shareholders  whose record  addresses are outside the United States
will receive  written notice of the Offer;  however,  Subscription  Certificates
will not be mailed to such shareholders.  The Rights to which those Subscription
Certificates  relate  will be held by the  Subscription  Agent for such  foreign
Record Date  Shareholders'  accounts until  instructions are received in writing
with payment to exercise the Rights. If no such instructions are received by the
Expiration Date, such Rights will expire. See "Subscription Agent".

Federal Income Tax Consequences

The  following  is a general  summary  of the  significant  federal  income  tax
consequences  of the  receipt  of  Rights  by a Record  Date  Shareholder  and a
subsequent  lapse or exercise of Rights.  The  discussion is based on applicable
provisions  of the  Internal  Revenue  Code of 1986,  as amended  ("Code"),  the
Treasury Regulations  promulgated  thereunder and other authorities currently in
effect, all of which are subject to change,  possibly with a retroactive effect.
This  discussion  does not purport to be complete or to deal with all aspects of
federal income  taxation that may be relevant to  shareholders in light of their
particular  circumstances or to shareholders  subject to special treatment under
the Code  (such  as  insurance  companies,  financial  institutions,  tax-exempt
entities,  employee benefit plans,  dealers in securities,  foreign corporations
and persons who are not U.S.  citizens or  residents),  and does not address any
state, local or foreign tax consequences.

For federal  income tax  purposes,  neither the receipt nor the  exercise of the
Rights by Record Date  Shareholders  will result in taxable  income to them, and
they will realize no loss with respect to any Rights that expire  without  being
exercised.  All-Star will realize no gain or loss on the  issuance,  exercise or
expiration of the Rights.

A Record Date  Shareholder's  holding period for a Share acquired on exercise of
Rights will begin with the date of  exercise,  and the  shareholder's  basis for
determining  gain or loss on the sale of that  Share  will  equal the sum of the
shareholder's basis in the exercised Rights, if any, plus the Subscription Price
for the Share. A Record Date  Shareholder's  basis in Rights will be zero unless
either (1) the Rights' fair market value on the date of  distribution  is 15% or
more of the fair market  value on that date of the Shares with  respect to which
the Rights were  distributed or (2) the shareholder  elects,  on his, her or its
federal income tax return for the taxable year in which the Rights are received,
to allocate  part of the basis of those Shares to the Rights.  If either  clause
(1) or (2)  applies,  then if the Rights are  exercised,  the  shareholder  will
allocate  his, her or its basis in the Shares with respect which the Rights were
distributed  between  those  Shares  and  the  Rights  in  proportion  to  their
respective  fair  market  values  on  the  distribution   date.  A  Record  Date
Shareholder's  gain or loss  recognized  on  sale  of a  Share  acquired  on the
exercise of Rights will be a capital gain or loss  (assuming  the Share was held
as a capital  asset at the time of sale) and will be  long-term  capital gain or
loss,  taxable  at a  maximum  rate  of  20%  in  the  case  of  a  noncorporate
shareholder, if the shareholder then held the Share for more than one year.

Employee Benefit Plan Considerations

Shareholders that are employee benefit plans subject to the Employee  Retirement
Income  Security Act of 1974, as amended  ("ERISA")  (including  separate profit
sharing/retirement  and savings plans, and plans for  self-employed  individuals
and their employees) and individual  retirement accounts ("IRAs)  (collectively,
"Retirement  Plans") should be aware that additional  contributions of cash to a
Retirement  Plan  (other  than  rollover   contributions  or  trustee-to-trustee
transfers  from other  Retirement  Plans) in order to exercise  Rights may, when
taken  together  with  contributions  previously  made,  be treated as excess or
nondeductible  contributions  subject to excise taxes. In the case of Retirement
Plans qualified under section 401(a) of the Code,  additional cash contributions
could cause violations of the maximum contribution limitations of section 415 of
the Code or other qualification  rules.  Retirement Plans in which contributions
are so limited should  consider  whether there is an additional  source of funds
available within the Retirement Plan,  including the liquidation of assets, with
which to exercise the Rights.  Because the rules governing  Retirement Plans are
extensive and complex,  Retirement  Plans  contemplating  the exercise of Rights
should consult with their counsel prior to such exercise.

Retirement Plans and other tax-exempt  entities,  including  governmental plans,
should  also be aware that if they  borrow to finance  their  exercise of Right,
they become  subject to tax on unrelated  business  taxable income under Section
511 of the Code.  If any portion of an IRA is used as security for a loan,  that
portion will be treated as a distribution to the IRA owner.

ERISA contains  fiduciary  responsibility  requirements,  and ERISA and the Code
contain  prohibited  transaction  rules, that may impact the exercise of Rights.
Due to the  complexity  of these  requirements  and rules and the  penalties for
non-compliance, Retirement Plans should consult with their counsel regarding the
consequences of their exercise of Rights under ERISA and the Code.

                    SPECIAL CONSIDERATIONS AND RISK FACTORS

Dilution

If you do not exercise all of your Rights during the Subscription  Period,  when
the Offering is over you will own a relatively  smaller  percentage  of the Fund
than if you had exercised all of your Rights. The Fund cannot tell you precisely
how much smaller the  percentage of the Fund that you would own because the Fund
does not know how many of the Fund's  Record  Date  Shareholders  will  exercise
their Rights and how many of their Rights they will exercise.

Shareholders  will  experience  an immediate  dilution of the  aggregate  NAV of
Shares as a result of the  completion of the Offer because (i) the  Subscription
Price per Share  will be less than the  Fund's  NAV per Share on the  Expiration
Date, (ii) the Fund will incur expenses in connection with the Offer,  and (iii)
the  number of Shares  outstanding  after the Offer will  increase  in a greater
percentage  than the increase in the size of the Fund's  assets.  This  dilution
also will affect  Record Date  Shareholders  to a greater  extent if they do not
exercise their Rights in full. It is not possible to state  precisely the amount
of any  decreases  in either NAV or in  ownership  interests,  because it is not
known at this time what the NAV per Share will be at the Expiration Date or what
proportion of the Shares will be subscribed. Finally, there may be a dilution of
earnings per Share due to the increase in the number of Shares outstanding,  but
only to the extent that  investments of the proceeds of the Offer do not achieve
the same  return as current  investments  held by the Fund.  To the extent  such
investments achieve a better return than current investments, earnings per Share
will experience appreciation.

The  following  example  assumes  that all of the Shares are sold at the assumed
Subscription  Price of $[ ] and after  deducting  all  expenses  related  to the
issuance of the Shares.

<TABLE>
<CAPTION>

                             NAV per Share on          Dilution                 Percentage
                            [          ], 2002     per Share in Dollars         Dilution
                            ------------------     ---------------------        -----------
<S>                        <C>                           <C>                       <C>
Primary Subscription
or [       ] Shares        $[        ]                   $[       ]                [      ]%

</TABLE>

Market Value and Net Asset Value

The shares of closed-end  investment  companies  frequently  trade at a discount
from net asset value.  This  characteristic  of shares of a closed-end fund is a
risk  separate  and  distinct  from the risk that the Fund's net asset value may
decrease.  Since the  commencement of the Fund's  operations,  the Fund's Shares
have traded in certain  periods in the market at a discount to net asset  value.
See "Share Price Data." The risk of purchasing  shares of a closed-end fund that
might trade at a discount is more  pronounced if you wish to sell your shares in
a relatively  short period of time. If you do so,  realization of a gain or loss
on your  investment  is  likely to be more  dependent  upon the  existence  of a
premium or discount than upon portfolio  performance.  The Fund's Shares are not
subject to redemption.  Investors  desiring liquidity may, subject to applicable
securities  laws,  trade  their  Shares in the Fund on any  exchange  where such
Shares are then trading at current market value,  which may differ from the then
current net asset value.  Moreover,  Shareholders expecting to sell their Shares
during the course of the Offer should be aware that there is a greater risk that
the potential  discount referred to above,  which may increase during the Offer,
will adversely affect them. This increased risk is because,  among other things,
the market price per Share may reflect the anticipated dilution that will result
from this  Offer.  The Fund  cannot  predict  whether the Shares will trade at a
discount or premium to NAV after completion of the Offer.

Possible Suspension of the Offer

All-Star  has,  as  required  by  the  Securities   and  Exchange   Commission's
registration  form,  undertaken  to  suspend  the  Offer  until it  amends  this
Prospectus  if  subsequent  to [ ],  2002,  the  effective  date  of the  Fund's
Registration  Statement,  All-Star's net asset value declines more than 10% from
its  net  asset  value  as  of [ ],  2002.  Accordingly,  All-Star  will  notify
shareholders  of any such  decline  and  thereby  permit  them to  cancel  their
exercise of Rights.

                                USE OF PROCEEDS

The net proceeds of the Offer,  assuming that all Shares offered hereby are sold
at an  assumed  Subscription  Price  of  $[ ] per  Share,  are  estimated  to be
approximately $[ ], after deducting expenses payable by All-Star estimated at $[
]. Such net  proceeds  will be  invested  by  All-Star's  Portfolio  Managers in
portfolio  securities in accordance  with  All-Star's  investment  objective and
policies.  It is anticipated  that  investment of such net proceeds under normal
market  conditions will take place during a period of approximately 30 days from
their  receipt by  All-Star,  and would in any event be  completed  within three
months.  Pending such investment the net proceeds will be invested in Short-Term
Money Market Instruments (as defined under "Investment  Objective,  Policies and
Risks" below).

                            THE MULTI-MANAGER CONCEPT

All-Star allocates its portfolio assets on an approximately  equal basis among a
number  of  independent  investment  management  firms  ("Portfolio  Managers"),
currently  five in  number,  recommended  by  LAMCO,  each of  which  employs  a
different investment style, and from time to time rebalances the portfolio among
the Portfolio  Managers so as to maintain an  approximately  equal allocation of
the portfolio among them throughout all market cycles.

In the opinion of LAMCO, the multi-manager  concept provides advantages over the
use of a single manager because of the following primary factors:

               (i)  most equity investment management-firms  consistently employ
                    a distinct  investment  style which causes them to emphasize
                    stocks with particular characteristics;

               (ii) because  of  changing   investor   preferences,   any  given
                    investment  style will move into and out of market favor and
                    will result in better  investment  performance under certain
                    market  conditions  but less  successful  performance  under
                    other conditions;

               (iii)consequently,  by  allocating  All-Star's  portfolio  on  an
                    approximately equal basis among Portfolio Managers employing
                    different  styles,  the  impact  of any one  such  style  on
                    investment  performance will be diluted,  and the investment
                    performance of the total  portfolio will be more  consistent
                    and less volatile over the long-term  than if a single style
                    were employed throughout the entire period;

               (iv) consistent performance at a given annual rate of return over
                    time produces a higher rate of return for the long-term than
                    more  volatile  performance  having the same average  annual
                    rate of return.

LAMCO,  based on the foregoing  principles and on its analysis and evaluation of
information  regarding the personnel and investment  styles and performance of a
universe of numerous professional  investment management firms, has selected for
appointment by All-Star a group of Portfolio Managers representing a blending of
different  investment styles which, in its opinion, is appropriate to All-Star's
investment objective.

LAMCO continuously  monitors the performance and investment styles of All-Star's
Portfolio  Managers  and  from  time to time  recommends  changes  of  Portfolio
Managers  based on factors such as changes in a Portfolio  Manager's  investment
style or a departure by a Portfolio  Manager from the investment style for which
it had been  selected,  a  deterioration  in a Portfolio  Manager's  performance
relative  to that of other  investment  management  firms  practicing  a similar
style,  or adverse  changes in its  ownership or  personnel.  Portfolio  Manager
changes  may also be made to change the mix of  investment  styles  employed  by
All-Star's  Portfolio  Managers.  Since its  inception,  All-Star has had eleven
Portfolio Manager changes.

All-Star Portfolio Manager changes, as well as the periodic  rebalancings of its
portfolio among the Portfolio Managers and the need to raise cash for All-Star's
quarterly distributions, may result in some portfolio turnover in excess of what
would  otherwise  be the case  (see  "Financial  Highlights"  above).  Increased
portfolio turnover would cause increased brokerage commission costs to All-Star,
and may result in greater  realization  of capital  gains,  which are taxable to
shareholders.

Under the  terms of an  exemptive  order  issued  to  All-Star  and LAMCO by the
Securities and Exchange Commission,  a portfolio management agreement with a new
or additional  Portfolio  Manager may be entered into in advance of  shareholder
approval,  provided  that the new  agreement  is at a fee no  higher  than  that
provided  in, and is on other  terms and  conditions  substantially  similar to,
All-Star's   agreements  with  its  other  Portfolio  Managers,   and  that  its
continuance  is subject to  approval by  shareholders  at  All-Star's  regularly
scheduled annual shareholder meeting (normally held in April) next following the
date of the new or additional portfolio management agreement.  Information about
Portfolio  Manager changes or additions made in advance of shareholder  approval
will be announced to the press  following  Board of Trustees  action and will be
included in the next report to shareholders.

     All-Star's current Portfolio Managers are:

         Mastrapasqua & Associates, Inc.
         Oppenheimer Capital LLC
         Boston Partners Asset Management, L.P.
         Westwood Management Corp.
         TCW Investment Management Company

It is expected that on March 1, 2002,  Schneider Capital  Managment  Corporation
will replace Westwood  Management Corp. as a Portfolio  Manager of All-Star.  On
February 12,  2002,  the Board of Trustees  approved  this change as well as the
proposed Portfolio  Management  Agreement between All-Star,  LAMCO and Schneider
Capital  Managment  Corporation.  The new Portfolio  Management  Agreement  with
Schneider Capital Management Corporation will be substantially  identical to one
currently  in place  with  Westwood  Management  Corp.  Under the new  Portfolio
Management Agreement,  Schneider Capital Management Corporation will be paid the
same portfolio  management fee that was paid to Westwood  Management Corp. prior
to the effective date of the change (see "Management of All-Star" below).

See Appendix A for  information  about these Portfolio  Managers,  including the
employees primarily  responsible for the day-to-day management of the portion of
All-Star's portfolio allocated to each.

                         INVESTMENT OBJECTIVE, POLICIES AND RISKS

All-Star's investment objective is to seek total investment return, comprised of
long term  capital  appreciation  and current  income.  It seeks its  investment
objective  through  investment  primarily in a  diversified  portfolio of equity
securities.

All-Star  invests  primarily  (at least 80% under normal market  conditions)  in
equity  securities,  defined as common stocks and  securities  convertible  into
common stocks such as bonds and preferred  stocks,  and securities having common
stock  characteristics such as warrants and rights to purchase equity securities
(although,  as a  non-fundamental  policy,  not more  than  20% of the  value of
All-Star's  total assets will be invested in rights and warrants).  All-Star may
lend its portfolio securities,  write covered call and put options and engage in
options and futures strategies (see "Investment Practices" below).

Although under normal market conditions All-Star will remain substantially fully
invested in equity securities, up to 20% of the value of All-Star's total assets
may  generally be invested in  short-term  money market  instruments,  including
certificates of deposit (negotiable  certificates issued against bank deposits),
other  interest-bearing bank deposits such as savings and money market accounts,
and bankers' acceptances (short-term  bank-guaranteed credit instruments used to
finance  transactions in goods) of domestic branches of U.S. banks having assets
of not less  than $1  billion,  obligations  issued  or  guaranteed  by the U.S.
Government   and  its   agencies   and   instrumentalities   ("U.S.   Government
Securities"),  commercial paper (unsecured short-term promissory notes issued by
corporations)  rated not lower than A-1 by Standard & Poor's Corporation ("S&P")
or Prime-1 by Moody's Investors Service, Inc. ("Moody's"),  short-term corporate
debt securities rated not lower than AA by S&P or Aa by Moody's,  and repurchase
agreements with respect to the foregoing (collectively, "Short-Term Money Market
Instruments"). All-Star may temporarily invest without limit in Short-Term Money
Market  Instruments for defensive  purposes when LAMCO or the Portfolio Managers
deem that  market  conditions  are such  that a more  conservative  approach  to
investment is desirable.

All-Star's  investment  objective  of seeking  total  investment  return and its
policy of investing under normal market  conditions at least 80% of the value of
its total  assets in equity  securities,  as well as certain  of its  investment
restrictions  referred  to under  Reducing  Risk below and in the  Statement  of
Additional  Information,  are  fundamental  and may  not be  changed  without  a
majority vote of All-Star's  outstanding Shares. Under the 1940 Act, a "majority
vote"  means  the  vote of the  lesser  of (a)  67% of the  Shares  of  All-Star
represented  at a  meeting  at  which  the  holders  of  more  than  50%  of the
outstanding Shares of All-Star are present or represented,  or (b) more than 50%
of the outstanding Shares of All-Star.  Non-fundamental  policies may be changed
by vote of the Board of Trustees.

Investment Practices

The following describes certain of the investment practices in which one or more
of All-Star's  Portfolio Managers may engage,  each of which may involve certain
special risks.

Lending of Portfolio  Securities.  Although  All-Star has not to date engaged in
securities  lending,   consistent  with  applicable   regulatory   requirements,
All-Star,  in order  to  generate  additional  income,  may  lend its  portfolio
securities  (principally to broker-dealers) where such loans are callable at any
time  and are  continuously  secured  by  collateral  (cash  or U.S.  Government
Securities)  equal to not less than the market value,  determined  daily, of the
securities  loaned.  All-Star would receive amounts equal to the interest on the
securities  loaned.  It will also be paid for  having  made the  loan.  Any cash
collateral  pursuant to these loans would be invested in Short-Term Money Market
Instruments.  All-Star  could be  subjected to delays in  recovering  the loaned
securities in the event of default or bankruptcy of the borrower.  All-Star will
limit such lending to not more than 30% of the value of All-Star's total assets.
The  Fund  may pay  fees to its  custodian  bank or  others  for  administrative
services in connection with securities loans.

Repurchase Agreements.  All-Star may enter into repurchase agreements with banks
or broker-dealer firms whereby such institutions sell U.S. Government Securities
or other  securities in which it may invest to All-Star and agree at the time of
sale to  repurchase  them at a mutually  agreed upon time and price.  The resale
price is greater than the purchase  price,  reflecting an  agreed-upon  interest
rate which is  effective  during the time between the purchase and resale and is
not related to the stated  interest rate on the purchased  securities.  All-Star
requires the seller of the  securities  to maintain on deposit  with  All-Star's
custodian bank securities in an amount at all times equal to or in excess of the
value  of the  repurchase  agreement.  In  the  event  that  the  seller  of the
securities defaults on its repurchase  obligation or becomes bankrupt,  All-Star
could receive less than the  repurchase  price on the sale of the  securities to
another  party or could be subjected to delays in selling the  securities.  Upon
normal market  conditions,  not more than 35% of All-Star's total assets will be
invested  in  Short-Term   Money  Market   Instruments,   including   repurchase
agreements,  and not more than 10% of All-Star's  net assets will be invested in
repurchase agreements maturing in more than seven days.


Options and Futures Strategies. All-Star may seek to increase the current return
of All-Star's  portfolio by writing  covered call or put options with respect to
the types of securities in which  All-Star is permitted to invest.  Call options
written by the Fund give the  purchaser the right for a stated period to buy the
underlying  securities  from All-Star at a stated price;  put options written by
the Fund give the purchaser the right for a stated period to sell the underlying
securities  to All-Star at a stated  price.  By writing a call option,  All-Star
limits its  opportunity  to profit from any  increase in the market value of the
underlying  security  above the exercise  price of the option;  by writing a put
option,  All-Star  assumes  the risk that it may be  required  to  purchase  the
underlying security at a price in excess of its current market value.

All-Star  may  purchase  put  options to protect its  portfolio  holdings in the
underlying  security  against a decline in market  value.  It may purchase  call
options to hedge against an increase in the prices of portfolio  securities that
it plans to purchase.  By  purchasing  put or call  options,  All-Star,  for the
premium paid,  acquires the right (but not the  obligation) to sell (in the case
of a put  option) or  purchase  (in the case of a call  option)  the  underlying
security at the option  exercise  price,  regardless of the then current  market
price.

All-Star  may also seek to hedge  against  declines  in the value of  securities
owned by it or increases in the price of securities it plans to purchase,  or to
gain or maintain  market  exposure,  through the purchase of stock index futures
and related options. For example,  All-Star may purchase stock index futures and
related options to enable a newly appointed  Portfolio Manager to gain immediate
exposure to underlying  securities markets pending the investment of the portion
of All-Star  portfolio  assigned to it. A stock index  future is an agreement in
which one  party  agrees to  deliver  to the other an amount of cash  equal to a
specific  dollar amount times the  difference  between the value of the specific
stock index at the close of the last  trading day of the  contract and the price
at which the agreement is made.

Expenses  and losses  incurred as a result of the hedging  strategies  described
above will reduce All-Star's current return.

Transactions in options and futures contracts may not achieve the intended goals
of  protecting   portfolio  holdings  against  market  declines  or  gaining  or
maintaining  market  exposure,  as  applicable,  to the extent  that there is an
imperfect  correlation  between the price  movements  of the options and futures
contracts and those of the securities to be hedged. In addition,  if a Portfolio
Manager's  prediction on stock market  movements is inaccurate,  All-Star may be
worse off than if it had not engaged in such options or futures transactions.

See  the  Statement  of  Additional   Information  for  additional   information
concerning options and futures transactions and the risk thereof.

Risks

As an  investment  company that holds  common  stocks,  All-Star's  portfolio is
subject to the  possibility  that common stock prices will decline over short or
even extended periods.  All-Star may remain  substantially fully invested during
periods  when stock  prices  generally  rise and also during  periods  when they
generally  decline.  In addition,  All-Star's  portfolio is subject to the risks
associated  with growth  stocks.  Growth stock  prices may be more  sensitive to
changes in current or expected  earnings  than the prices of other  stocks,  and
growth  stocks may not  perform as well as value  stocks or the stock  market in
general.  Risks are inherent in investments in equities,  and Fund  shareholders
should  be able to  tolerate  significant  fluctuations  in the  value  of their
investment  in  All-Star.  All-Star is  intended  to be a  long-term  investment
vehicle and is not designed to provide  investors with a means of speculating on
short-term  stock  market  movements.  Investors  should not consider the Fund a
complete investment program.

In addition to the foregoing  investment risks, shares of closed-end  investment
companies such as All-Star are not redeemable and frequently trade at a discount
from their net asset value.  This risk is separate  and  distinct  from the risk
that  All-Star's  net asset  value  may  decline.  See  "Share  Price  Data" for
information  about the market  price and net asset  value of  All-Star's  Shares
since January 1, 2000.

Reducing Investment Risk

As a matter of fundamental policy, All-Star will not (i), as to 75% of its total
assets,  purchase the securities (other than U.S. Government  Securities) of any
one issuer if after such  purchase  more than 5% of its assets would be invested
in the securities of that issuer, (ii) purchase more than 10% of the outstanding
voting  securities of such issuer,  (iii) invest 25% more of its total assets in
the securities of issuers in the same industry,  or (iv) invest more than 10% of
its total  assets  in  securities  that at the time of  purchase  have  legal or
contractual  restrictions on resale (including  unregistered securities that are
eligible  for resale to  qualified  institutional  buyers  pursuant to Rule 144A
under  the  Securities  Act  of  1933).  See  "Investment  Restrictions"  in the
Statement of Additional Information.

                        MANAGEMENT OF ALL-STAR

The management of All-Star's  business and affairs is the  responsibility of its
Board of Trustees.

All-Star  has a Fund  Management  Agreement  with LAMCO  pursuant to which LAMCO
provides the Portfolio Manager selection, evaluation, monitoring and rebalancing
services   ("investment   management   services")  described  above  under  "The
Multi-Manager Concept." No single individual at LAMCO is responsible for LAMCO's
decisions  with  respect  to the  retention  or  replacement  of  the  Portfolio
Managers.

LAMCO is also  responsible  for the  provision  of  administrative  services  to
All-Star, including the provision of office space, shareholder and broker-dealer
communications,  compensation  of  officers  of  All-Star  who are  officers  or
employees of LAMCO or its affiliates,  and the  supervision of transfer  agency,
dividend disbursing, custodial and other services provided to others. Certain of
LAMCO's administrative responsibilities have been delegated to Colonial.

LAMCO has its offices at One  Financial  Center,  Boston,  Massachusetts  02211.
LAMCO was  organized  in 1985 and is an  indirect  wholly  owned  subsidiary  of
Columbia  Management  Group,  Inc., which in turn is an indirect  majority owned
subsidiary  of  FleetBoston  Financial  Corporation,  a U.S.  financial  holding
company.

Under  All-Star's  Portfolio  Management  Agreements  with each of its Portfolio
Managers  and  LAMCO,  each  Portfolio   Manager  has  discretionary   authority
(including  for the  selection  of brokers  and  dealers  for the  execution  of
All-Star's  portfolio  transactions)  with respect to the portion of  All-Star's
assets  allocated  to it by LAMCO  from  time to  time,  subject  to  All-Star's
investment  objective  and  policies,  to the  supervision  and  control  of the
Trustees,  and to  instructions  from  LAMCO.  As  described  under the  section
entitled  "The  Multi-Manager  Concept",  LAMCO  from  time to time  reallocates
All-Star's  portfolio  assets  in  order  to  maintain  an  approximately  equal
allocation of them among the Portfolio Managers and to preserve an approximately
equal weighting among the different investment styles practiced by the Portfolio
Managers.  Although the Portfolio  Managers'  activities  are subject to general
oversight by LAMCO and the Trustees and officers of All-Star,  neither LAMCO nor
such  Trustees and  officers  evaluate the  investment  merits of the  Portfolio
Managers' selections of individual securities.  See Appendix A for a description
of the Portfolio Managers.

Although  All-Star  does  not  permit  a  Portfolio  Manager  to act  or  have a
broker-dealer  affiliate act as broker for Fund portfolio transactions initiated
by  it,  All-Star's   Portfolio   Managers  are  permitted  to  place  portfolio
transactions   initiated  by  them  with  another   Portfolio   Manager  or  its
broker-dealer   affiliate  for  execution  on  an  agency  basis,  provided  the
commission  does not exceed the usual and customary  broker's  commission  being
paid to other brokers for comparable transactions and is otherwise in accordance
with All-Star's procedures adopted under Rule 17e-1 under the 1940 Act.

Under  All-Star's  Fund  Management  Agreement  with  LAMCO  and  its  Portfolio
Management  Agreements with the Portfolio  Managers,  All-Star pays LAMCO a fund
management fee and an administrative fee, and LAMCO in turn pays the fees of the
Portfolio  Managers  from the fund  management  fees paid to it. The annual fees
that are paid under the  current  agreements  are shown  below (fees are payable
quarterly  based on the indicated  percentage of the Fund's  average  weekly net
assets during the prior quarter).

<TABLE>
<CAPTION>


                                       Fund Management
                                       Fee Paid to LAMCO
                                       and Portfolio Management
 Average weekly                        Fee Paid to                                   Administrative
 Net Asset Value                       Portfolio Managers                            Fee Paid to LAMCO   Total Fees
<S>                                   <C>                                           <C>                   <C>
First $400 million                    0.800% (0.400% to Portfolio Managers)         0.200%                1.00%
Next $400 million                     0.720% (0.360% to Portfolio Managers)         0.180%                0 90%
Next $400 million                     0.648% (0.324% to Portfolio Managers)         0.162%                0.81%
Over $1.2 billion                      0.584% (0.292% to Portfolio Managers)        0.146%                0.73%
</TABLE>

Colonial provides pricing and bookkeeping services to All-Star for an annual fee
of $10,000  per year plus a fee based on the Fund's  average  net assets for any
month that such  assets are over $50  million.  The fee shall be  calculated  as
follows:  $190,000  divided by the sum of the Fund's average  monthly net assets
plus the average  monthly net assets of Liberty  All-Star  Growth Fund, Inc. The
Fund also reimburses  Colonial for its  out-of-pocket  expenses,  including fees
payable to third parties for pricing services.

Custodian and Transfer Agent

State Street Bank and Trust Company, 225 Franklin Street, Boston,  Massachusetts
02110,  is All-Star's  custodian.  EquiServe  Trust  Company,  N.A.,  150 Royall
Street,  Canton,  Massachusetts  02021, is the transfer and dividend  disbursing
agent and registrar for All-Star.

Expenses of the Fund

LAMCO  provides the Portfolio  Manager  selection,  evaluation,  monitoring  and
rebalancing services and assumes responsibility for the administrative  services
described  above,  pays the  compensation of and furnishes  office space for the
officers of All-Star who are affiliated with LAMCO, and pays the management fees
of the Portfolio  Managers.  All-Star  pays all its  expenses,  other than those
expressly assumed by LAMCO. The expenses payable by All-Star include: management
and administrative  fees payable to LAMCO;  pricing and bookkeeping fees payable
to Colonial;  fees and expenses of independent auditors; fees for transfer agent
and  registrar,  dividend  disbursing,  custodian  and  portfolio  recordkeeping
services;  expenses in connection with the Automatic  Dividend  Reinvestment and
Cash  Purchase  Plan;  expenses in  connection  with  obtaining  quotations  for
calculating  the  value  of  All-Star's  net  assets;  taxes  (if  any)  and the
preparation of All-Star's tax returns; brokerage fees and commissions; interest;
costs of Trustee and Shareholder  meetings  (including  expenses of printing and
mailing proxy material  therefor);  expenses of printing and mailing  reports to
shareholders; fees for filing reports with regulatory bodies and the maintenance
of All-Star's  existence;  membership dues for investment company industry trade
associations;  legal fees;  stock  exchange  listing fees and expenses;  fees to
federal and state authorities for the registration of Shares;  fees and expenses
of Trustees who are not trustees,  officers,  employees or stockholders of LAMCO
or its affiliates;  insurance and fidelity bond premiums;  and any extraordinary
expenses of a non-recurring nature.

                           DESCRIPTION OF SHARES

General

All-Star's authorized  capitalization  consists of an unlimited number of Shares
of beneficial  interest,  without par value, of which [ ] Shares were issued and
outstanding on the date of this  Prospectus.  The currently  outstanding  Shares
are,  and the Shares  offered  hereby when  issued and paid for  pursuant to the
terms of the Offer will be, fully paid and non-assessable. Shareholders would be
entitled  to  share  pro  rata in the  net  assets  of  All-Star  available  for
distribution to Shareholders upon liquidation of All-Star.

Shareholders are entitled to one vote for each Share held.  All-Star's Shares do
not have cumulative voting rights, which means that the holders of more than 50%
of the Shares of All-Star  voting for the election of Trustees can elect all the
Trustees standing for election, and, in such event, the holders of the remaining
Shares will not be able to elect any of such Trustees.

Repurchase of Shares

All-Star is a closed-end  investment company and as such its Shareholders do not
have the right to cause  All-Star to redeem  their  All-Star  Shares.  All-Star,
however,  is  authorized  to  repurchase  its Shares on the open market when its
Shares are trading at a discount  from their net asset  value.  All-Star  has no
current plans to repurchase its Shares.

Anti-takeover  Provisions  of the  Declaration  of  Trust;  Super-majority  Vote
Requirement for Conversion to Open-End Status

All-Star's  Declaration of Trust contains  provisions  (commonly  referred to as
"antitakeover" provisions) which are intended to have the effect of limiting the
ability of other entities or persons to acquire control of All-Star, to cause it
to engage in  certain  transactions,  or to modify its  structure.  The Board of
Trustees is divided into three  classes,  each having a term of three years.  On
the date of the  annual  meeting  of  shareholders  in each year the term of one
class expires.  This provision could delay for up to three years the replacement
of a  majority  of the Board of  Trustees.  The  affirmative  vote of 75% of the
Shares will be required to authorize All-Star's  conversion from a closed-end to
an  open-end  investment  company,  unless such  conversion  is  recommended  by
All-Star's Board of Trustees,  in which event such conversion would only require
the majority  vote of  All-Star's  Shareholders  (as defined  under  "Investment
Objective, Policies and Risks" above).

In  addition,  the  affirmative  vote of the holders of 75% of the Shares of the
Fund will be required generally to authorize any of the following transactions:

(i) All-Star's merger or consolidation with or into any other corporation;

(ii) the issuance of any securities of All-Star to any person or entity for
cash;

(iii) the sale,  lease or exchange of all or any substantial  part of All-Star's
assets to any entity or person  (except  assets having an aggregate  fair market
value of less than $1,000,000); or

(iv) the sale,  lease or exchange to  All-Star,  in exchange for  securities  of
All-Star,  of any  assets  of any  entity  or person  (except  assets  having an
aggregate fair market value of less than $1,000,000);

if such  corporation,  person or  entity  is  directly,  or  indirectly  through
affiliates,  the  beneficial  owner of five  percent or more of the  outstanding
Shares of All-Star.  (A 66 2/3% vote would otherwise be required for a merger or
consolidation  or a sale,  lease  or  exchange  of all or  substantially  all of
All-Star's  assets  unless  recommended  by the  Trustees,  in which case only a
majority  vote would be required).  However,  such 75% vote will not be required
with  respect to the  transactions  listed in (i)  through  (iv) above where the
Board of Trustees under certain  conditions  approves the transaction.  However,
depending upon the transaction, a different Shareholder vote may nevertheless be
required under Massachusetts law.

The foregoing  super-majority vote requirements may not be amended except with a
similar supermajority vote of the Shareholders.

These  provisions  will make more difficult a change in All-Star's  structure or
management or consummation of the foregoing  transactions  without the Trustees'
approval.  The  anti-takeover  provisions  could  have the  effect of  depriving
Shareholders of an opportunity to sell their Shares at a premium over prevailing
market prices by  discouraging  a third party from seeking to obtain  control of
All-Star  in a tender  offer  or  similar  transaction.  However,  the  Board of
Trustees continues to believe that the anti-takeover  provisions are in the best
interests of All-Star and its Shareholders because they provide the advantage of
potentially  requiring persons seeking control of All-Star to negotiate with its
management  regarding the price to be paid and  facilitating  the  continuity of
All-Star's  management  and  its  continuing  application  of the  multi-manager
concept.

The Board also believes that the super-majority  vote requirement for conversion
to an open-end  investment  company is in the best  interest of All-Star and its
shareholders  because it will allow  All-Star to  continue  to benefit  from the
advantages of its closed-end  structure until such time that,  based on relevant
factors  including  the  then  current  relationship  of  the  market  price  of
All-Star's Shares to their net asset value, the Board determines to recommend to
Shareholders All-Star's conversion to an open-end investment company.

In accordance  with the  Declaration of Trust,  the question of conversion to an
open-end  investment  company  was  submitted  to the  vote of  Shareholders  at
All-Star's  1993 annual  meeting  held on April 6, 1993,  such  conversion  then
requiring  only the  affirmative  vote of a majority  of  All-Star's  Shares (as
defined in the 1940  Act).  In  accordance  with the  Trustees'  recommendation,
Shareholders,  by substantial  majorities,  rejected the conversion proposal and
approved an amendment to All-Star's  Declaration  of Trust  instituting  the 75%
super-majority  vote  referred  to above for any future  conversion  to open-end
status.



                         DISTRIBUTIONS; AUTOMATIC DIVIDEND
                        REINVESTMENT AND CASH PURCHASE PLAN

10% Distribution Policy

All-Star's  current  distribution  policy is to pay  distributions on its Shares
totaling  approximately  10% of its net asset  value per year,  payable  in four
quarterly  distributions of 2.5% of its net asset value at the close of the NYSE
on  the  Friday  prior  to  each  quarterly   declaration   date.   These  fixed
distributions,  which are not related to All-Star's net investment income or net
realized capital gains or losses, will be treated as ordinary dividend income up
to the amount of All-Star's  current and accumulated  earnings and profits.  If,
for any calendar year, the total distributions made under the 10% pay-out policy
exceed  All-Star's net  investment  income and net realized  capital gains,  the
excess will be treated as a tax-free  return of capital to each  Shareholder (up
to the amount of the shareholder's basis in his or her Shares) and thereafter as
gain from the sale of Shares. The amount treated as a tax-free return of capital
will  reduce the  shareholder's  adjusted  basis in his or her  Shares,  thereby
increasing  his or her potential  gain or reducing his or her potential  loss on
the  subsequent  sale of his or her  Shares.  All-Star  made  distribution  from
capital  in  1987,  1988,  1989,  1990,  1992,  1993 and  1994  (See  "Financial
Highlights").

To the extent All-Star's 10% payout policy results in distributions in excess of
its net investment  income and net realized  capital gains,  such  distributions
will  decrease  its total  assets and  increase  its expense  ratio to a greater
extent than would have been the case without the 10% payout policy. In addition,
in order to make distributions under the 10% payout policy, All-Star may have to
sell portfolio securities at times when the particular  investment styles of its
Portfolio Managers would dictate not doing so.

All-Star  may,  in  the  discretion  of  the  Board  of  Trustees,   retain  for
reinvestment,  and not  distribute,  net capital gain for any year to the extent
that its net investment  income and net realized gains exceed the minimum amount
required to be distributed for such year under the 10% pay-out policy,  although
All-Star reserves the right to distribute such excess. Retained net capital gain
will be taxed to both All-Star and the Shareholders as long-term  capital gains;
however,  each  shareholder  will be able to claim a proportionate  share of the
federal  income tax paid by All-Star as a credit  against his or her own federal
income tax  liability and will be entitled to increase the adjusted tax basis in
his or her Shares by the difference between the amount taxed and the credit.

All-Star may pay all or a substantial  portion of its distributions in each year
in the form of newly issued Shares (plus cash in lieu of any  fractional  Shares
that  would   otherwise   be  issuable)   to  all   shareholders   except  those
non-participants   in  the  Plan  who   specifically   elect  to  receive  their
distribution  in cash by completing  and signing an option card, a copy of which
will be enclosed  with the notice of each such  distribution  payable in Shares,
and returning it on a timely basis to EquiServe Trust Company,  N.A., All-Star's
transfer agent and dividend paying agent.

The number of Shares to be issued to a Shareholder  in payment of a distribution
declared  payable in Shares  will be  determined  by dividing  the total  dollar
amount of the  distribution  by the lower of the  market  value or the net asset
value  per  Share  on the  valuation  date  for the  distribution  (but not at a
discount of more than 5% from the market value). Market value per Share for this
purpose  will be the last sales price on the NYSE on the  valuation  date or, if
there are no sales on that day,  the mean  between  the  closing bid and closing
asked quotations for that date.

Automatic Dividend Reinvestment and Cash Purchase Plan

Under  All-Star's  Automatic  Dividend  Reinvestment and Cash Purchase Plan (the
"Plan"), shareholders whose shares are registered in their own name may elect to
participate in the Plan and have all distributions  automatically  reinvested by
EquiServe  Trust  Company,  as agent for  participants  in the Plan  (the  "Plan
Agent"),  in  additional  Shares of All-Star.  Shareholders  who do not elect to
participate  in the Plan  will  receive  all  distributions  (other  than  those
declared payable in Shares as described above) in cash.

Under the Plan,  distributions  declared payable in Shares or cash at the option
of  shareholders  are paid to  participants in the Plan entirely in newly issued
full and  fractional  Shares  valued at the lower of the market value or the net
asset  value per Share on the  valuation  date for the  distribution  (but not a
discount of more than 5% from the market value).  Distributions declared payable
in cash will be  reinvested  for the  accounts  of  participants  in the Plan in
additional Shares purchased by the Plan Agent on the open market, on the NYSE or
elsewhere at  prevailing  market  prices (if the Fund's  Shares are trading at a
discount  to their net asset  value) or in newly  issued  Shares  (if the Fund's
Shares  are  trading  at  or  above  their  net  asset  value).   Dividends  and
distributions  are subject to  taxation,  whether  received in cash or in Shares
(see "Tax Status" below).

Participants  in the Plan have the option of making  additional cash payments in
any amount [from $100 to $3,000] on a monthly  basis for  investment in All-Star
Shares  purchased on the open market.  These  voluntary  cash  payments  will be
invested on or about the 15th day of each calendar month, and voluntary payments
should be sent so as to be received by the Plan Agent no later than ten business
days before the next investment date. Barring  suspension of trading,  voluntary
cash payments will be invested  within [30] days of receipt.  A participant  may
withdraw a voluntary cash payment by written  notice  received by the Plan Agent
at least 48 hours before such payment is to be invested.

The Plan Agent  maintains  all  shareholder  accounts in the Plan and  furnishes
written confirmations of all transactions in the account,  including information
needed by  shareholders  for tax  records.  Shares in the  account  of each Plan
participant will be held by the Plan Agent in non-certificated  form in the name
of the  participant,  and each  shareholder's  proxy will  include  those Shares
purchased or received pursuant to the Plan.

In the case of Shareholders such as banks,  brokers or nominees that hold Shares
for others who are the  beneficial  owners,  the Plan Agent will  administer the
Plan on the basis of the  number of  Shares  certified  from time to time by the
record  shareholder as  representing  the total amount  registered in the record
shareholder's name and held for the account of beneficial owners who participant
in the Plan.

There is no charge to  participants  for  reinvesting  distributions  payable in
either Shares or cash.  The Plan Agent's fees for handling the  reinvestment  of
such  distributions  are paid by All-Star.  There are no brokerage  charges with
respect to Shares  issued  directly  by  All-Star  as a result of  distributions
payable in Shares or in cash.  However,  each participant bears a pro rata share
of brokerage  commissions  incurred with respect to the Plan Agent's open market
purchases in connection with the reinvestment of distributions  declared payable
in cash.

With respect to purchases  from  voluntary  cash  payments,  the Plan Agent will
charge $1.25 for each such purchase for a participant,  plus a pro rata share of
the brokerage  commissions.  Brokerage  charges for purchasing  small amounts of
Shares for individual accounts through the Plan are expected to be less than the
usual  brokerage  charges  for  such  transactions,  as the Plan  Agent  will be
purchasing  Shares  for all  participants  in  blocks  and  prorating  the lower
commission thus attainable.

The automatic reinvestment of dividends and other distributions will not relieve
plan  participants  of any  income  tax that may be  payable  thereon.  See "Tax
Status" below.

A  participant  may elect to withdraw from the Plan at any time by notifying the
Plan Agent in writing.  There will be no penalty for  withdrawal  from the Plan,
and  shareholders  who have previously  withdrawn from the Plan may rejoin it at
any time. A withdrawal will only be effective for subsequent  distributions with
a record  date at least ten days after the notice of  withdrawal  is received by
the Plan Agent.

Experience under the Plan may indicate that changes are desirable.  Accordingly,
All-Star reserves the right to amend or terminate the Plan.

Shareholders must affirmateively elect to participate in the Plan, and may do so
by completing an application and filing it with the Plan Agent. Shareholders may
call or write the Plan Agent,  EquiServe Trust Company,  P.O. Box 8200,  Boston,
Massachusetts 02266-8200 (800-542-3863) for information about the Plan.

Shareholders  whose  All-Star  Shares  are held of  record in  "street  name" by
broker-dealer  firms or banks may not be able to  participate  in the Plan,  and
such  Shareholders who are participating in the Plan may not be able to transfer
their Shares to another broker-dealer or bank and continue to participate in the
Plan.

A  Shareholder  may elect to withdraw from the Plan at any time by notifying the
Plan Agent in writing. There will be no penalty for withdrawal from the Plan and
Shareholders  who have  previously  withdrawn from the Plan may rejoin it at any
time. A withdrawal  will only be effective for subsequent  distributions  with a
record date at least ten days after the notice of  withdrawal is received by the
Plan Agent.

                                  TAX STATUS

The following  discussion  briefly  summarizes  the general rules  applicable to
taxation of All-Star  and its  shareholders.  Shareholders  are urged to consult
with their own tax advisers  concerning the tax  consequences of their continued
investment in All-Star and of their receipt and exercise of the Rights.

All-Star  has elected to be, and  intends to  continue to qualify  each year for
federal income tax treatment as a regulated  investment  company under the Code,
and intends to make  distributions  to the  Shareholders  in accordance with the
timing  requirements  set out in the Code.  As a  result,  it is  expected  that
All-Star will be relieved of federal income tax on its net investment income and
net  realized   capital  gains  to  the  extent  it  distributes   them  to  its
Shareholders.  (See  "Distributions;  Automatic  Dividend  Reinvestment and Cash
Purchase Plan--10% Distribution Policy" regarding All-Star's authority to retain
and pay taxes on, and not distribute,  net capital gain).  All-Star also expects
to  make  sufficient   annual   distributions   to  avoid  being  subject  to  a
nondeductible 4% federal excise tax imposed on regulated  investment  companies.
If All-Star fails to qualify as a regulated  investment  company in any year, it
would  incur  federal  corporate  income  tax  on its  taxable  income  and  its
distributions  would be taxable as ordinary  dividend income to the Shareholders
to the extent of its net  investment  income and net capital  gain. In addition,
All-Star could be required to recognize  unrealized gains, pay substantial taxes
and  interest  and  make  substantial   distributions  before  requalifying  for
treatment as a regulated investment company.

Distributions  by All-Star from net investment  income and net realized  capital
gains are subject to taxation  whether  received by  shareholders  in cash or in
Shares of All-Star.  Shareholders  receiving a dividend or other distribution in
the form of newly issued Shares will be treated for federal  income tax purposes
as  receiving  a  distribution  in an  amount  equal to the fair  market  value,
determined  as  of  the  distribution   date,  of  the  Shares  received.   Such
Shareholders will have a cost basis in each newly issued Share equal to the fair
market value of a Share of All-Star on the distribution date.  Distributions are
generally   taken  into  account  for  tax  purposes  when  paid,   except  that
distributions  paid in January but declared in the last quarter of the preceding
calendar  year must be taken  into  account  as if paid on  December  31 of such
preceding  calendar year. A portion of All-Star's net investment  income paid to
corporate   shareholders   that  is  attributable  to  dividends  from  domestic
corporations may be eligible for the 70% dividends-received  deduction available
to  corporations.   Availability  of  the  deduction  for  particular  corporate
shareholders  is subject to certain  limitations,  and  deducted  amounts may be
subject to the alternative  minimum tax or result in certain basis  adjustments.
Distributions  from net capital  gain are taxable as  long-term  capital  gains,
regardless of how long the Shareholder has held the Shares, and are not eligible
for the dividends-received  deduction.  Net capital gain is taxable, in the case
of a noncorporate  shareholder,  at a maximum rate of 20% if attributable to the
disposition of Shares that the shareholder held for more than twelve months.

If a  shareholder  holds Shares of All-Star for six months or less,  any loss on
the sale of the Shares will be treated as a long-term capital loss to the extent
of any amount  reportable  by the  Shareholder  as  long-term  capital gain with
respect to such Shares. Any loss realized on a disposition of Shares may also be
disallowed under rules relating to wash sales.

At the time of an investor's  purchase of All-Star Shares,  All-Star's net asset
value may reflect  undistributed  net investment  income or capital gains or net
unrealized  appreciation  of  securities  it holds.  As of  December  31,  2001,
All-Star's investments had net unrealized gains of $98,462,182.  Realization and
a subsequent  distribution  to a shareholder of such amount,  although it may in
effect  constitute  a return of his or her  investment,  would be taxable to the
shareholder as ordinary income or capital gain, as described  above. For federal
income tax purposes,  All-Star is permitted to carry forward to another  taxable
year its net realized  capital  losses,  if any, from earlier  taxable years and
thus may realize  net  capital  gains in the later year up to the amount of such
losses without being required to pay taxes on or to distribute such gains. As of
December 31, 2001,  the end of its last completed  fiscal year,  All-Star had no
capital loss carryovers.

Individuals and certain other non-corporate All-Star Shareholders may be subject
to 30.5%  withholding  on reportable  dividends  and capital gain  distributions
("back-up withholding").  Generally, Shareholders subject to back-up withholding
will be those for whom a taxpayer  identification  number and  certain  required
certificates are not on file with All-Star or who, to All-Star's knowledge, have
furnished an  incorrect  number.  In addition,  All-Star is required to withhold
from  distributions to any Shareholder who does not certify to All-Star that the
Shareholder is not subject to back-up  withholding  due to  notification  by the
Internal  Revenue Service that the shareholder  has  under-reported  interest or
dividend income.

Distributions   from  net  investment   income  paid  to  Shareholders  who  are
non-resident   aliens  or  foreign  entities  may  be  subject  to  30%  federal
withholding tax (but not, in such event,  subject to back-up withholding) unless
a reduced rate of  withholding  or a withholding  exemption is provided under an
applicable  treaty.  Non-U.S.  shareholders  are urged to consult  their own tax
advisers concerning the applicability of the withholding tax.

Information  concerning the federal income tax status of All-Star  dividends and
other distributions is mailed to shareholders annually.

Distributions and the transactions  referred to in the preceding  paragraphs may
be subject to state and local income taxes, and the treatment thereof may differ
from the federal income tax  consequences  discussed  herein.  Shareholders  are
advised to consult with their tax advisers  concerning the  application of state
and local taxes.

See "The Offer-Federal  Income Tax Consequences" for a discussion of the federal
income tax consequences regarding the Rights.

                                        GENERAL

All-Star was organized on August 20, 1986 as a  "Massachusetts  business  trust"
and commenced  investment  operations on November 3, 1986.  Under  Massachusetts
law,  shareholders  of such a trust may,  under certain  circumstances,  be held
personally  liable  as  partners  for  its  obligations.   However,   All-Star's
Declaration of Trust contains an express disclaimer of Shareholder liability for
the acts or  obligations  of  All-Star  and  provides  for  indemnification  and
reimbursement  of expenses out of All-Star's  property for any shareholder  held
personally  liable  for  the  obligations  of  All-Star.  Thus,  the  risk  of a
Shareholder  incurring  financial  loss on account of an All-Star  liability  is
limited to circumstances in which both inadequate insurance existed and All-Star
itself were unable to meet its obligations from the liquidation of its portfolio
investments.

LAMCO is a direct wholly owned subsidiary of Columbia Management Group, Inc., an
indirect majority owned subsidiary of FleetBoston Financial Corporation.

Under the Fund Management Agreement between All-Star and LAMCO, All-Star may use
the  name  "Liberty  All-Star"  only so long as the  Fund  Management  Agreement
remains  in effect.  If the Fund  Management  Agreement  is no longer in effect,
All-Star is obligated  (to the extent it lawfully  can) to cease using such name
or any other name indicating  that it is advised by or otherwise  connected with
LAMCO.  In  addition,  LAMCO may grant the  non-exclusive  right to use the name
"Liberty  All-Star" to any other entity,  including any other investment company
of  which  LAMCO  or  any  of  its  affiliates  is  the  investment  adviser  or
distributor.

                       STATEMENT OF ADDITIONAL INFORMATION

Additional  information  about  the  Fund  is  contained  in  the  Statement  of
Additional Information, a copy of which is available at no charge by calling the
Information  Agent  at  the  telephone  number  indicated  on the  cover  of the
Prospectus.  Set  forth  below is the  Table of  Contents  of the  Statement  of
Additional Information.

                                                           Table of Contents

Investment Objective and Policies..............................................
Investment Restrictions........................................................
Investment Advisory and Other Services.........................................
Trustees and Officers of All-Star..............................................
Portfolio Security Transactions...............................................
Principal Shareholders.........................................................
Financial Statements...........................................................


                                 A-1
                              APPENDIX A
             INFORMATION ABOUT THE PORTFOLIO MANAGERS

Current Portfolio Managers

Mastrapasqua & Associates, Inc.
814 Church Street, Suite 600
Nashville, Tennessee 37203

Mastrapasqua & Associates,  Inc.  ("Mastrapasqua")  was appointed as an All-Star
Portfolio  Manager  effective  November  1, 2000.  Mastrapasqua,  an  investment
advisor since 1993, is an  independently  owned firm.  Ownership of Mastrapasqua
lies 100% with its officers and  trustees.  Mastrapasqua's  principal  executive
officer is Frank Mastrapasqua,  Ph.D., Chairman and Chief Executive Officer. Mr.
Mastrapasqua,  Thomas A. Trantum, President, and Mauro Mastrapasqua,  First Vice
President,  may be deemed to be  control  persons of  Mastrapasqua  by virtue of
their aggregate  ownership of more than 25% of the  outstanding  voting stock of
Mastrapasqua.  As of December 31, 2001,  Mastrapasqua managed approximately $1.8
billion in assets.


Oppenheimer Capital LLC
1345 Avenue of the Americas
New York, New York 10105

Oppenheimer  Capital LLC ("Oppenheimer") was appointed as an All-Star Portfolio
Manager effective  February 15, 1990.  Oppenheimer,  an investment advisor since
1969,  is a Delaware  partnership  and an indirect  subsidiary  of Allianz  A.G.
Oppenheimer's  principal  executive officer is Kenneth M. Poovey. As of December
31, 2001, Oppenheimer managed over $37.2 billion in assets.


Boston Partners Asset Management, L.P.
28 State Street
Boston, Massachusetts 02109

Boston Partners Asset Management,  L.P. ("Boston  Partners") was appointed as an
All-Star  Portfolio  Manager effective May 11, 1998. Boston Partners has been an
investment  advisor since 1995. The Sole General  Partner of Boston  Partners is
Boston Partners, Inc., a Delaware Subchapter S Corporation. Desmond J. Heathwood
is the  President  of Boston  Partners,  Inc. As of December  31,  2001,  Boston
Partners managed over $10.2 billion in assets.


Westwood Management Corp.
300 Crescent Court
Dallas, Texas 75201

Westwood  Management Corp.  ("Westwood") was appointed as an All-Star  Portfolio
Manager effective November 1, 1997. Westwood,  an investment advisor since 1983,
is a wholly owned  subsidiary of Southwest  Securities  Group,  Inc.  Westwood's
principal  executive  officer is Susan M. Byrne and its directors are Ms. Byrne,
Brian Casey,  Don A. Buchhotz,  David  Glatstein,  and Patricia R. Fraze.  As of
December 31, 2001, Westwood managed over $4.0 billion in assets. Effective March
1, 2002,  Westwood  is  expected  to no longer  serve as an  All-Star  Portfolio
Manager.


TCW INVESTMENT MANAGEMENT COMPANY
865 South Figueroa Street
Los Angeles, CA  90017

TCW Investment Management Company ("TCW") was appointed as an All-Star Portfolio
Manager  effective  April 1, 1999.  TCW is a wholly owned  subsidiary of The TCW
Group, Inc. ("TCW Group").  Established in 1971, TCW Group's direct and indirect
subsidiaries,  including TCW, provide a variety of trust,  investment management
and  investment  advisory  services.  Societe  Generale Asset  Management,  S.A.
("SGAM") owns 51% of the TCW Group. SGAM is a wholly owned subsidiary of Societe
Generale,  S.A.  ("Societe  Generale  ").  SGAM is located at 92708  place de la
Corpole,  92078  Paris,  France.  Societe  Generale  is located at 29  boulevard
Haussman,   75009,  Paris,   France.  The  employees,   management,   and  other
shareholders  of the TCW Group own the remaining  49% of the company.  Under the
terms of an  agreement  between  the TCW Group and SGAM,  SGAM will  acquire  an
additional 19% interest in the TCW Group over the course of the next five years.
SGAM and TCW have stated their  intention to maintain the personnel,  processes,
investment  strategy and operations of TCW, which will continue to operate under
the TCW brand name.  As of December 31, 2001,  TCW and its  affiliates  had over
$87.7 billion in assets under management or committed to management.

Glen E. Bickerstaff, Managing Director U.S. Equities, has managed the portion of
All-Star's  portfolio  allocated  to TCW since its  appointment  as an  All-Star
Portfolio Manager. Mr. Bickerstaff has been with TCW since 1994.

New Portfolio Manager

It is expected that on March 1, 2002,  Schneider Capital  Managment  Corporation
will replace Westwood  Management Corp. as a Portfolio  Manager of All-Star.  On
February 12,  2002,  the Board of Trustees  approved  this change as well as the
proposed Portfolio  Management  Agreement between All-Star,  LAMCO and Schneider
Capital Managment Corporation.  A description of Schneider Capital Management is
below.

SCHNEIDER CAPITAL MANAGEMENT CORPORATION
450 East Swedesford Road
Wayne, PA 19087

Schneider  Capital  Management  Corporation  ("Schneider")  was  appointed as an
All-Star  Portfolio  Manager  effective March 1, 2002.  Schneider,  a registered
investment  advisor,  was  founded  in 1996 by  Arnold  C.  Schneider  III.  Mr.
Schneider  serves as President  and Chief  Investment  Officer of Schneider  and
manages that portion of the Fund's  portfolio  assigned to  Schneider.  Prior to
founding Schneider, Mr. Schneider was a Senior Vice President and Partner of the
Wellington Management Company. Schneider is 100% employee-owned.  As of December
31, 2001, Schneider managed  approximately $1.6 billion in assets. No person has
been  authorized  to give  any  information  or to make any  representation  not
contained  in this  Prospectus  and,  if  given  or made,  such  information  or
representation  must  not  be  relied  upon  as  having  been  authorized.  This
Prospectus  does not  constitute  an offering of any  securities  other than the
registered securities to which it relates or an offer to any person in any State
or  jurisdiction  of the United  States or any country where such offer would be
unlawful.  Neither the delivery of this  Prospectus  nor any sale made hereunder
shall,  under any  circumstances,  create an implication  that there has been no
change in the facts as set forth in the Prospectus or in the affairs of the Fund
since the date hereof.

                                                             ____________



TABLE OF CONTENTS
Prospectus Summary.............................................................
Expenses.......................................................................
Financial Highlights...........................................................
Share Price Data...............................................................
Investment Performance.........................................................
The Offer......................................................................
Special Considerations and Risk Factors........................................
Use of Proceeds................................................................
The Multi-Manager Concept......................................................
Investment Objective, Policies and Risks.......................................
Management of All-Star ........................................................
Description of Shares..........................................................
Distributions; Automatic Dividend
    Reinvestment and Cash Purchase Plan........................................
Tax Status.....................................................................
General........................................................................
Statement of Additional Information............................................
Appendix A--
    Information about the Portfolio Managers......A-1


                                                              [LOGO HERE]



                                 LIBERTY
                                 ALL-STAR
                                EQUITY FUND
                 A Multi-Managed Investment Company



                   [ ] Shares of Beneficial Interest Issuable upon Exercise
                       of Rights to Subscribe for Such Shares




                             ___________________
                                 PROSPECTUS

                                 [ ], 2002
                             ___________________

<PAGE>
                         LIBERTY ALL-STAR EQUITY FUND
                     STATEMENT OF ADDITIONAL INFORMATION
                                 [ ], 2002

This Statement of Additional Information is not a prospectus, and should be read
in conjunction  with the Prospectus of Liberty  All-Star Equity Fund ("All-Star"
or the  "Fund")  dated [ ],  2002.  A copy of the  Prospectus  may be  obtained,
without charge,  by calling or writing Liberty Asset  Management  Company at One
Financial Center, Boston, Massachusetts 02111(800-542-3863).

 TABLE OF CONTENTS                                                   PAGE

 Investment Objectives and Policies
 Investment Restrictions
 Investment Advisory and Other Services
 Trustees and Officers of All-Star
 Portfolio Security Transactions
 Principal Shareholders
 Financial Statements



                               INVESTMENT OBJECTIVES AND POLICIES

A  description  of the  investment  objective  of  All-Star  and  the  types  of
securities  in  which  it  may  invest  is  contained  in the  Prospectus  under
"Investment Objective, Policies and Risks."

Options and Futures Strategies

The  effective use of options and future  strategies  is dependent,  among other
things,  on  All-Star's  ability to terminate  options and futures  positions at
times when it or its  Portfolio  Managers  deem it desirable to do so.  Although
All-Star  will not enter into an option or futures  position  unless it believes
that a liquid  secondary  market  exists for such option or future,  there is no
assurance  that  All-Star  will be able to effect  closing  transactions  at any
particular time or at an acceptable price.  All-Star  generally expects that its
options and futures  transactions  will be  conducted on  recognized  securities
exchanges. In certain instances, however, All-Star may purchase and sell options
in the over-the-counter market. All-Star's ability to terminate option positions
established in the over-the-counter  market may be more limited than in the case
of exchange-traded options and may also involve the risk that securities dealers
participating  in such  transactions  would  fail to meet their  obligations  to
All-Star. All-Star may not purchase or sell future contracts and related options
if immediately  thereafter  the sum of the amount of initial margin  deposits on
All-Star's  existing  futures and premiums  paid for such related  options would
exceed  5% of the  market  value of  All-Star's  net  assets.  Such  limitation,
however, will not limit All-Star's loss on such contracts and options,  which is
potentially unlimited.

Writing Covered Put and Call Options on Securities

All-Star may write  covered  call options and covered put options on  optionable
securities of the types in which it is permitted to invest from  time-to-time as
its respective  Portfolio Managers determine is appropriate in seeking to attain
its  objectives.  Call options  written by All-Star give the holder the right to
buy the underlying  securities  from All-Star at a stated  exercise  price;  put
options give the holder the right to sell the underlying security to All-Star at
a stated price.

All-Star may write only covered  options,  which means that, so long as All-Star
is  obligated  as the  writer  of a call  option,  it will  own  the  underlying
securities subject to the option (or comparable  securities satisfying the cover
requirements of securities exchanges). In the case of put options, All-Star will
maintain in a separate  account cash or short-term  U.S.  Government  Securities
with a value  equal to or  greater  than the  exercise  price of the  underlying
securities.  All-Star may also write  combinations  or covered puts and calls on
the same underlying security.

All-Star  will  receive  a premium  from  writing  a put or call  option,  which
increases  All-Star's return in the event the option expires  unexcercised or is
closed out at a profit.  The amount of the  premium  will  reflect,  among other
things,  the relationship of the market price of the underlying  security to the
exercise  price of the option,  the term of the option and the volatility of the
market price of the  underlying  security.  By writing a call  option,  All-Star
limits its  opportunity  to profit from any  increase in the market value of the
underlying  security  above the exercise  price of the option.  By writing a put
option,  All-Star  assumes  the risk that it may be  required  to  purchase  the
underlying  security for an exercise  price higher than its then current  market
value,  resulting in a potential  capital loss if the purchase price exceeds the
market  value  plus the amount of the  premium  received,  unless  the  security
subsequently appreciates in value.

All-Star may terminate an option that it has written prior to its  expiration by
entering  into a closing  purchase  transaction  in which it purchases an option
having the same terms as the option  written.  All-Star will realize a profit or
loss from such  transaction if the cost of such transaction is less or more than
the  premium  received  from the  writing  of the  option.  In the case of a put
option,  any loss so incurred may be partially or entirely offset by the premium
received  from a  simultaneous  or  subsequent  sale of a different  put option.
Because  increases in the market price of a call option will  generally  reflect
increases in the market price of the  underlying  security,  any loss  resulting
from the  repurchase of a call option is likely to be offset in whole or in part
by unrealized appreciation of the underlying security owned by All-Star.

Purchasing Put and Call Options on Securities

All-Star  may  purchase  put  options to protect  its  portfolio  holdings in an
underlying  security against a decline in market value. Such hedge protection is
provided during the use of the put options since All-Star,  as holder of the put
option,  is able to sell  the  underlying  security  at the put  exercise  price
regardless of any decline in the underlying  security's  market price.  In order
for a put option to be profitable,  the market price of the underlying  security
must  decline  sufficiently  below the  exercise  price to cover the premium and
transaction costs. By using put options in this manner, All-Star will reduce any
profit it might  otherwise  have  realized  in its  underlying  security  by the
premium paid for the put option and by transaction costs.

All-Star may also  purchase  call options to hedge against an increase in prices
of securities that it wants ultimately to buy. Such hedge protection is provided
during the life of the call option since All-Star, as holder of the call option,
is able to buy the underlying  security at the exercise price  regardless of any
increase in the underlying  security's  market price. In order for a call option
to be  profitable,  the  market  price  of the  underlying  security  must  rise
sufficiently  above the  exercise  price to cover the  premium  and  transaction
costs. By using call options in this manner,  All-Star will reduce any profit it
might  have  realized  had it  bought  the  underlying  security  at the time it
purchased  the call  option  by the  premium  paid for the  call  option  and by
transaction costs.

Purchase and Sale of Options and Futures on Stock Indices

All-Star may purchase and sell options on stock  indices and stock index futures
as a hedge against movements in the equity markets.

Options on stock  indices are similar to options on specific  securities  except
that, rather than the right to take or make delivery of the specific security at
a  specified  price,  an option on a stock  index  gives the holder the right to
receive,  upon exercise of the option, an amount of cash if the closing level of
that stock index is greater  than,  in the case of a call,  or less than, in the
case of a put, the exercise price of the option. This amount of cash is equal to
such difference between the closing price of the index and the exercise price of
the option  expressed in dollars times a specified  multiple.  The writer of the
option is  obligated,  in return for the premium  received,  to make delivery of
this amount.  Unlike options on specific securities,  all settlements of options
on stock  indices are in cash and gain or loss  depends on general  movements in
the stocks  included in the index  rather  than price  movements  in  particular
stocks.

A stock index  futures  contract is an  agreement  in which one party  agrees to
deliver to the other an amount of cash equal to a specific  dollar  amount times
the  difference  between the value of a specific stock index at the close of the
last trading day of the  contract and the price at which the  agreement is made.
No physical delivery of securities is made.

If a Portfolio  Manager of All-Star expects general stock market prices to rise,
it might  purchase a call option on a stock index or a futures  contract on that
index as a hedge against an increase in prices of particular  equity  securities
it wants  ultimately to buy. If in fact the stock index does rise,  the price of
the particular equity securities intended to be purchased may also increase, but
that increase would be offset in part by the increase in the value of All-Star's
index option or futures  contract  resulting from the increase in the index. If,
on the other hand, the Portfolio  Manager expects general stock market prices to
decline, it might purchase a put option or sell a futures contract on the index.
If that  index  does in fact  decline,  the  value of some or all of the  equity
securities  in All-Star's  portfolio  may also be expected to decline,  but that
decrease  would be offset  in part by the  increase  in the value of  All-Star's
position in such put option or future.  All-Star may purchase  call options on a
stock  index or a futures  contracts  on that index to enable a newly  appointed
Portfolio Manager to gain immediate exposure to the underlying securities market
pending the  investment  in  individual  securities of the portion of All-Star's
portfolio assigned to it.

In connection  with  transactions  in stock index  options,  futures and related
options,  All-Star will be required to deposit as "initial  margin" an amount of
cash and short-term  U.S.  Government  Securities  equal to from 5% to 8% of the
contract  amount.  Thereafter,  subsequent  payments  (referred to as "variation
margin") are made to and from the broker to reflect  changes in the value of the
futures contract.

Options on Stock Index Futures Contracts

All-Star  may  purchase  and write call and put options on stock  index  futures
contracts. All-Star may use such options on futures contracts in connection with
its hedging strategies in lieu of purchasing and writing options directly on the
underlying  securities or stock indices or purchasing and selling the underlying
futures. For example, All-Star may purchase put options or write call options on
stock index futures, rather than selling futures contracts, in anticipation of a
decline in general  stock market  prices,  or purchase call options or write put
options on stock index futures,  rather than purchasing  such futures,  to hedge
against  possible  increases in the price of equity  securities  which  All-Star
intends to purchase.

Risk Factors in Options and Futures Transactions

The  effective use of options and futures  strategies is dependent,  among other
things,  on  All-Star's  ability to terminate  options and futures  positions at
times  when  its  respective  Portfolio  Managers  deem it  desirable  to do so.
Although  All-Star will not enter into an option or futures  position unless its
Portfolio Managers believe that a liquid secondary market exists for such option
or future,  there is no assurance  that All-Star will be able to effect  closing
transactions  at  any  particular  time  or at  an  acceptable  price.  All-Star
generally expects that its option and futures  transactions will be conducted on
recognized securities  exchanges.  In certain instances,  however,  All-Star may
purchase and sell options in the over-the-counter market.  All-Star's ability to
terminate option  positions  established in the  over-the-counter  market may be
more  limited than in the case of  exchange-traded  options and may also involve
the risk that securities  dealers  participating in such transactions would fail
to meet their obligations to All-Star.

The use of  options  and  futures  involves  the risk of  imperfect  correlation
between  movements  in options and future  prices and  movements in the price of
securities which are the subject of the hedge.  Such  correlation,  particularly
with respect to options on stock indices and stock index futures,  is imperfect,
and such risk increases as the composition of All-Star's portfolio diverges from
the  composition of the relevant index.  The successful use of these  strategies
also  depends on the  ability of the  Portfolio  Manager to  correctly  forecast
interest rate or general stock market price movements.

Regulatory Matters

All-Star will conduct its  purchases and sales of futures  contracts and writing
of related options  transactions  in accordance with the rules,  regulations and
any exemptions  promulgated by the Commodity Futures Trading Commission ("CFTC")
and  the  Securities  and  Exchange  Commission  ("SEC")  with  respect  to such
transactions.

                           INVESTMENT RESTRICTIONS

Except as indicated otherwise,  the following investment  restrictions have been
adopted  for  All-Star  as  fundamental  policies  and may be changed  only by a
majority vote (as defined under  "Investment  Objective,  Policies and Risks" in
the Prospectus) of All-Star's outstanding shares.  Non-fundamental  policies may
be changed by the Board of Trustees without shareholder approval.

All-Star may not:

(1) Issue senior securities, except as permitted by (2) below.

(2) Borrow money, except that it may borrow in an amount not exceeding 7% of its
total assets  (including the amount  borrowed) taken at market value at the time
of such  borrowing,  and except that it may make  borrowings in amounts up to an
additional  5% of its total  assets  (including  the amount  borrowed)  taken at
market  value at the time of such  borrowing  to finance the  repurchase  of its
shares, to obtain such short-term  credits as are necessary for the clearance of
securities  transactions,  or for  temporary  or  emergency  purposes,  and  may
maintain  and renew any of the  foregoing  borrowings,  provided  that  All-Star
maintains  asset  coverage  of 300% with  respect to all such  borrowings.  As a
non-fundamental policy, All-Star will not borrow in an amount in excess of 5% of
its total assets (including the amount borrowed).

(3) Pledge,  mortgage or hypothecate its assets,  except to secure  indebtedness
permitted by paragraph (2) above and then only if such  pledging,  mortgaging or
hypothecating  does not exceed 12% of  All-Star's  total  assets taken at market
value at the time of such  pledge,  mortgage  or  hypothecation.  The deposit in
escrow of securities in connection  with the writing of put and call options and
collateral  arrangements  with respect to margin for futures  contracts  are not
deemed to be pledges or hypothecation for this purpose.

(4) Act as an underwriter  of securities of other issuers,  except to the extent
that, in connection with the disposition of portfolio  securities,  All-Star may
be deemed to be an underwriter for purposes of the Securities Act of 1933.

(5) Purchase or sell real estate or any interest  therein,  except that All-Star
may invest in  securities  issued or  guaranteed  by corporate  or  governmental
entities  secured  by  real  estate  or  interests  therein,  such  as  mortgage
pass-throughs and collateralized  mortgage  obligations,  or issued by companies
that invest in real estate or interests therein.

(6) Make loans to other persons except for loans of portfolio  securities (up to
30% of total assets) and except  through the use of repurchase  agreements,  the
purchase of commercial  paper or the purchase of all or a portion of an issue of
debt  securities  in  accordance  with its  investment  objective,  policies and
restrictions,  and provided that not more than 10% of All-Star's net assets will
be invested in repurchase agreements maturing in more than seven days.

(7) Invest in commodities or in commodity  contracts (except stock index futures
and options).

(8)  Purchase  securities  on margin  (except to the extent that the purchase of
options  and  futures  may  involve  margin and except  that it may obtain  such
short-term  credits as may be necessary  for the clearance of purchases or sales
of securities), or make short sales of securities.

(9) Purchase the  securities  of issuers  conducting  their  principal  business
activity in the same industry (other than securities issued or guaranteed by the
United States,  its agencies and  instrumentalities)  if, immediately after such
purchase,  the value of its  investments  in such industry would comprise 25% or
more of the value of its total  assets taken at market value at the time of each
investment.

(10) Purchase  securities  of any one issuer,  if (a) more than 5% of All-Star's
total  assets  taken  at  market  value  would at the  time be  invested  in the
securities  of such  issuer,  except  that  such  restriction  does not apply to
securities  issued or guaranteed by the United States Government or its agencies
or  instrumentalities  or corporations  sponsored thereby, and except that up to
25%  or  All-Star's  total  assets  may  be  invested  without  regard  to  this
limitation;  or (b) such  purchase  would at the time result in more than 10% of
the outstanding voting securities of such issuer being held by All-Star,  except
that up to 25% of All-Star's total assets may be invested without regard to this
limitation.

(11) Invest in securities of another registered  investment company,  except (i)
as  permitted  by the  Investment  Company Act of 1940,  as amended from time to
time,  or any rule or order  thereunder,  or (ii) in  connection  with a merger,
consolidation, acquisition or reorganization.

(12) Purchase any security,  including any repurchase agreement maturing in more
than  seven  days,  which  is  subject  to  legal or  contractual  delays  in or
restrictions on resale (including  unregistered securities that are eligible for
resale  pursuant to Rule 144A under the Securities Act of 1933), or which is not
readily  marketable,  if more than 10% of the net assets of  All-Star,  taken at
market value, would be invested in such securities.

(13) Invest for the purpose of  exercising  control  over or  management  of any
company.

(14)  Purchase  securities  unless  the issuer  thereof or any  company on whose
credit the purchase was based,  together with its predecessors,  has a record of
at least three years'  continuous  operations prior to the purchase,  except for
investments  which,  in  the  aggregate,  taken  at  cost  do not  exceed  5% of
All-Star's total assets.

If a percentage  restriction on investment or utilization of assets as set forth
above  is  adhered  to at the time an  investment  is made,  a later  change  in
percentage  resulting  from a change in the market values of  All-Star's  assets
will not be considered a violation of the restriction.

                    INVESTMENT ADVISORY AND OTHER SERVICES

As stated  under  "Management  of  All-Star" in the  Prospectus,  Liberty  Asset
Management Company ("LAMCO") performs the investment  management services and is
responsible for the administrative  services described therein.  LAMCO,  through
Columbia  Management  Group,  Inc.  ("Columbia"),  is an indirect majority owned
subsidiary of  FleetBoston  Financial  Corporation,  Boston,  Massachusetts.  As
indicated  under  "Trustees and Officers of All-Star"  below,  one of All-Star's
Trustees  and all of its officers  are  officers of LAMCO,  Colonial  Management
Associates, Inc., Columbia or other affiliates of Columbia.

Reference  is  made  to  Appendix  A of the  Prospectus  for  the  names  of the
controlling  persons of All-Star's  current and new  Portfolio  Managers and the
names of the individuals at each Portfolio Manager primarily responsible for the
management of the portion of All-Star's  portfolio  assigned to it. None of such
Portfolio  Managers  has any  affiliation  with LAMCO or  (except  as  Portfolio
Manager) with All-Star.

As described  under  "Management of All-Star" in the  Prospectus,  All-Star pays
LAMCO a fund management fee for its investment  management  services (from which
LAMCO pays the  Portfolio  Managers'  fee),  and an  administrative  fee for its
administrative services.

For the years ended  December  31, 2000 and 2001 the total fund  management  and
administrative   fees  paid  to  LAMCO   were   $12,256,060   and   $10,701,655,
respectively, of which an aggregate of $4,900,684 and $4,268,503,  respectively,
was paid to the Portfolio Managers.

All-Star's current Fund Management Agreement and Portfolio Management Agreements
will  continue  in  effect  until  July 31,  2003 and will  continue  in  effect
thereafter so long as such continuance is specifically  approved annually by (a)
the Board of Trustees or (b) the majority vote of All-Star's  outstanding shares
(as defined under "Investment Objective, Policies and Risks" in the Prospectus),
provided that, in either event,  the  continuance is also approved by a majority
of the Trustees who are not "interested persons" (as defined in the 1940 Act) of
All-Star (the  "Disinterested  Trustees"),  LAMCO or the Portfolio Managers by a
vote  cast in  person  at a meeting  called  for the  purpose  of voting on such
approval.  The Fund  Management  Agreement  may be terminated on 60 days written
notice  by  either  party,  and  the  Portfolio  Management  Agreements  may  be
terminated  on 30  days'  notice  by any  party,  and any such  agreements  will
terminate automatically if assigned.

It is expected that on March 1, 2002,  Schneider  Capital Managment will replace
Westwood  Management Corp. as a Portfolio  Manager of All-Star.  On February 12,
2002,  the  Board of  Trustees  approved  this  change  as well as the  proposed
Portfolio  Management  Agreement  between  All-Star,  LAMCO and Scheider Capital
Managment.  The  new  Portfolio  Management  Agreement  with  Schneider  Capital
Management  will be  substantially  identical  to one  currently  in place  with
Westwood  Management  Corp.  Under  the  new  Portfolio  Management   Agreement,
Schneider Capital Management will be paid the same portfolio management fee that
was paid to Westwood Management Corp. prior to the effective date of the change.

The Fund and LAMCO have adopted Codes of Ethics pursuant to the  requirements of
the  Investment  Company Act of 1940,  as amended.  These Codes of Ethics permit
personnel  subject to the Codes to invest in  securities,  including  securities
that may be purchased or held by the funds. Copies of the Codes of Ethics of the
Fund and LAMCO can be reviewed and copied at the  Commission's  Public Reference
Room in Washington,  D.C.  Information on the operation of the Public  Reference
Room may be obtained by calling the Commission at  1-202-942-8090.  The Codes of
Ethics are also  available on the EDGAR  database on the  Commission's  Internet
site at  www.sec.gov,  or may be obtained,  after paying a  duplicating  fee, by
electronic request at publicinfo@sec.gov,  or by writing the Commission's Public
Reference Section, Washington, D.C. 20549-0102.

Custodian and Pricing and Bookkeeping Agent

State Street Bank and Trust Company (the "Bank"),  225 Franklin Street,  Boston,
Massachusetts  02110,  is the custodian of the portfolio  securities and cash of
All-Star.  As such, the Bank holds All-Star's  portfolio  securities and cash in
separate  accounts on  All-Star's  behalf and receives  and  delivers  portfolio
securities  and cash in  connection  with  portfolio  transactions  initiated by
All-Star's  Portfolio Managers,  collects income due on its portfolio securities
and  disburses  funds  in  connection  with the  payment  of  distributions  and
expenses.

Colonial  Management  Associates,  Inc.  ("Colonial"),  an  affiliate  of LAMCO,
performs  pricing and  bookkeeping  services for All-Star  (see  "Management  of
All-Star" in the  Prospectus).  For the years ended  December 31, 2000 and 2001,
All-Star paid pricing and bookkeeping  fees to Colonial  Management  Associates,
Inc. of $283,283 and $221,055 respectively.

Independent Accountants

[ ], are the independent  accountants of All-Star.  The independent  accountants
audit and report on the  annual  financial  statements  and  provide  tax return
preparation  services and assistance  and  consultation  in connection  with the
review of various SEC filings.

                            TRUSTEES AND OFFICERS

The names of the Trustees and officers of the Liberty  All-Star Equity Fund, the
date each was first elected or appointed to office,  their term of office, their
principal business  occupations and other directorships they have held during at
least the last five years, are shown below.

<TABLE>
<CAPTION>

                      Position with      Term of Office                                      Number of Portfolios         Other
Name, Address         Liberty All-Star   and Length of            Principal Occupation(s)    in Fund Complex          Directorships
   and Age            Equity Fund        Service                  During Past Five Years     Overseen by Trustee           Held
- --------------        ----------------   --------------           -----------------------    ---------------------     ------------
Disinterested Trustee(s)
<S>                    <C>               <C>                      <C>                                    <C>        <C>
Robert J. Birnbaum     Trustee           Trustee Since 1994;      Retired since January, 1994;            2          Dresdner RCM
(Age 74)                                 Term Expires 2003        Special Counsel, Dechert Price                     Global Funds
c/o Liberty Asset                                                 & Rhoads (September 1988 to                        (investment
Management Company                                                December 1993); President and                      companies and
One Financial Center                                              Chief Operating Officer, New                       Chicago Options
Boston, MA 02111                                                  York Stock Exchange, Inc. (May                     Exchange Board
                                                                  1995 to June 1988).

James E. Grinnell      Trustee          Trustee Since 1986;       Private investor since November         2           None
(Age 71)                                Term Expires 2002         1988; President and Chief
c/o Liberty Asset                                                 Executive Officer, Distribution
Managment Company                                                 Management Systems, Inc. (1983
One Financial Center                                              to May 1986); Senior Vice President,
Boston, MA 02111                                                  Operations, The Rockport Company
                                                                  (importer and distributor of shoes)
                                                                  (May 1986 to November 1988).

Richard W. Lowry       Trustee          Trustee Since 1986;       Private Investor since 1987            105           None
(Age 65)                                Term Expires 2004         (formerly Chairman and Chief
c/o Liberty Asset                                                 Executive Officer, U.S. Plywood
Management Company                                                Corporation (building products
One Financial Center                                              manufacturer)).
Boston, MA 02111

John J. Neuhauser     Trustee           Trustee Since 1998;       Academic Vice President and Dean       105          Saucony, Inc.
(Age 58)                                Term Expires 2004         of Faculties since August 1999,                     (athletic
c/o Liberty Asset                                                 Boston College (formerly Dean,                       footwear);
Management Company                                                Boston College School of Management                 SkillSoft
One Financial Center                                              from September 1977 to September 1999).             Corp.
Boston, MA 02111                                                                                                      (E-Learning)

Interested Trustee

William E. Mayer*     Trustee           Trustee Since 1998;       Managing Partner, Park Avenue Equity                Johns Manville
(Age 61)                                Term Expires 2003         Partners (venture capital) since                    (building
c/o Liberty Asset                                                 February q1999 (formerly Founding                    products
Management Company                                                Partner, Development Capital LLC from                manufacturer)
One Financial Center                                              November 1996 to February 1999; Dean and             Lee Enter-
Boston, MA 02111                                                  Professor, College of Business and                   prises (print
                                                                  Management, University of Maryland from              and on-line
                                                                  October 1992 to November 1996).                      media); WR
                                                                                                                       Hambrecht +
                                                                                                                       Co.
                                                                                                                       (financial
                                                                                                                        service
                                                                                                                        provider);
                                                                                                                       First Health
                                                                                                                       (healthcare);
                                                                                                                       Systech
                                                                                                                       Retail
                                                                                                                       Systems
                                                                                                                       (retail
                                                                                                                        industry
                                                                                                                        technology
                                                                                                                        provider)).

</TABLE>
*A Trustee who is an "interested person" (as defined in the Investment
Company Act of 1940 ("1940 Act")) of the Trust or LAMCO.  Mr. Mayer is an
interested person by reason of his affiliation with WR Hambrecht + Co.

<TABLE>
<CAPTION>

Officers

                                    Position with
                                   Liberty All-Star           Year First Elected or         Principal Occupation(s)
 Name, Address and Age              Equity Fund                 Appointed to Office         During Past Five Years
- --------------------------         ----------------           ----------------------        -----------------------
<S>                                 <C>                               <C>                  <C>
William R. Parmentier, Jr.          President                         1998                 President and Chief Executive Officer
(Age 49)                                                                                   (since June 1998) and Chief Invest-
Liberty Asset Management                                                                   ment Officer (since May 1995), Senior
 Company                                                                                   Vice President (May 1995 to June 1998);
One Financial Center                                                                       Liberty Asset Management Company.
Boston, MA 02111

Christopher S. Carabell             Vice President                    1997                 Senior Vice President, Product Develop-
(Age 38)                                                                                   ment and Marketing (since January 1999),
Liberty Asset Management                                                                   Vice President, Investments, Liberty
 Company                                                                                   Asset Management Company (March 1996 to
One Financial Center                                                                       Janaury 1999); Associate Director, U.S.
Boston, MA 02111                                                                           Equity Research, BARRA Rogers Casey,
                                                                                           investment consultants (January 1995 to
                                                                                           February 1996).

Mark T. Haley, CFA                  Vice President                    1999                 Vice President-Investments (since
(Age 37)                                                                                   January 1998), Director of Investment
Liberty Asset Management                                                                   Analysis (December 1996 to December
 Company                                                                                   1998), Investment Analyst (January 1994
One Financial Center                                                                       to November 1996), Liberty Asset
Boston, MA 02111                                                                           Management Company.

J. Kevin Connaughton                Treasurer                         2000                 Treasurer of the Liberty Funds and of the
(Age 37)                                                                                   Liberty All-Star Funds since December
One Financial Center                                                                       2000 (formerly Controller of the
Boston, MA 02111                                                                           Liberty Funds and of the Liberty All-
                                                                                           Star Funds from February 1998 to October
                                                                                           2000); Treasurer of the Stein oe Funds
                                                                                           since February 2001 (formerly Controller
                                                                                           from May 2000 to February 2001); Senior
                                                                                           Vice President of Liberty Funds Group
                                                                                           LLC ("LFG") since January 2001 (formerly
                                                                                           Vice President from April 2000 to
                                                                                           January 2001; Vice President of Colonial
                                                                                           Management Associates, Inc. ("Colonial")
                                                                                           from February 1998 to October 2000;
                                                                                           Senior Tax Manager, Coopers & Lybrand,
                                                                                           LLP from April 1996 to January 1998.

Michelle G. Azrailly                Controller                        2001                 Controller of the Liberty Funds and of
(Age 32)                                                                                   Liberty All-Star Funds since May 2001;
One Financial Center                                                                       Vice President of LFG since March 2001
Boston, MA 02111                                                                           (formerly Assistant Vice President of
                                                                                           Fund Administration from September, 2000
                                                                                           to February 2001; Compliance Manager
                                                                                           of Fund Administration from September
                                                                                           1999 to August 2000) (formerly
                                                                                           Assistant Vice President and Assistant
                                                                                           Treasurer, Chase Global Fund Services -
                                                                                           Boston from August 1996 to September
                                                                                           1999.

Vicki Benjamin                      Chief Accounting Officer         2001                  Chief Accounting Officer of the Liberty
(Age 40)                                                                                   Funds and of the Liberty All-Star Funds
One Financial Center                                                                       since June 2001; Vice President of LFG
Boston, MA 02111                                                                           since April 2001 (formerly Vice Presi-
                                                                                           dent, Corporate Audit, State Street
                                                                                           Bank and Trust Company from May 1998 to
                                                                                           April 2001; Audit Manager from July 1994
                                                                                           to June 1997; Senior Audit Manager from
                                                                                           July 1997 to May 1998, Coopers &
                                                                                           Lybrand, LLP).

Jean S. Loewenberg                  Secretary                        2002                  Secretary of the Liberty Funds and of
(Age 56)                                                                                   the Liberty All-Star Funds since
One Financial Center                                                                       February 2002; Senior Vice President and
Boston, MA 02111                                                                           Group Senior Counsel, Fleet National
                                                                                           Bank since November 1996.

</TABLE>

Role of the Board of Trustees

The  Trustees  of  All-Star  are  responsible  for the  overall  management  and
supervision  of  All-Star's  affairs and for  protecting  the  interests  of the
shareholders.  The Trustees  meet  periodically  throughout  the year to oversee
All-Star's  activities,  review contractual  arrangements with service providers
for All-Star and review All-Star's performance.

Audit Committee

Messrs.  Birnbaum,  Grinnell,  Lowry  and  Neuhauser  are  members  of the Audit
Committee of the Board of Trustees of All-Star.  The Audit Committee's functions
include  making  recommendations  to the Trustees  regarding  the  selection and
performance of the independent  accountants,  and reviewing  matters relative to
accounting and auditing practices and procedures,  accounting  records,  and the
internal accounting controls, of All-Star, and certain service providers. In the
fiscal year ended December 31, 2001, the Audit Committee convened [ ] times.

Share Ownership

The  following  table shows the dollar range of equity  securities  beneficially
owned by each  Trustee in  All-Star  and in all  Liberty  Funds  overseen by the
Trustee as of December 31, 2001.

<TABLE>
<CAPTION>

                                                                   Aggregate Dollar Range of Equity Securities Owned in
                                      Dollar Range of Equity       All Registered Funds Overseen by Trustee in Liberty
                                   Securities Owned in All-Star                       Family of Funds
  Name of Trustee
<S>                                             <C>                                          <C>
Disinterested Trustees
Robert J. Birnbaum                              $                                            $
James E. Grinnell                               $                                            $
Richard W. Lowry                                $                                            $
John J. Neuhauser                               $                                            $
Interested Trustees
William E. Mayer                                $                                            $

</TABLE>

As of December  31, 2001,  no  disinterested  Trustee or any of their  immediate
family members owned beneficially or of record any class of securities of LAMCO,
a portfolio  manager or any person  controlling,  controlled  by or under common
control with LAMCO or a portfolio manager.

During the calendar  years ended  December  31, 2000 and December 31, 2001,  Mr.
Lowry  had a  material  interest  in a  trust  which  owns  units  of a  limited
partnership whose investments are managed by M.A.  Weatherbie & Co., a portfolio
manager of Liberty  All-Star  Growth Fund,  Inc.,  and whose general  partner is
Weatherbie Limited  Partnership,  an affiliate of M.A. Weatherbie & Co., Inc. As
of December  31, 2001,  the Trust's  interest in this  limited  partnership  was
valued at approximately  $3.6 million.  During the calendar years ended December
31, 2000 and December 31, 2001,  other than Mr. Lowry's  interest in this trust,
no  disinterested  Trustee (or their immediate family members) had any direct or
indirect  interest  in LAMCO,  a  portfolio  manager or any person  controlling,
controlled by or under common control with LAMCO or a portfolio manager.

During the calendar  years ended  December  31, 2000 and  December 31, 2001,  no
disinterested  Trustee (or their  immediate  family  members)  had any direct or
indirect material interest in any transaction or series of similar  transactions
with (i) All-Star;  (ii) another fund managed by LAMCO, a portfolio manager or a
person  controlling,  controlled  by or under  common  control  with  LAMCO or a
portfolio  manager;  (iii)  LAMCO  or  a  portfolio  manager;  (iv)  any  person
controlling,  controlled  by or under  common  control with LAMCO or a portfolio
manager; or (v) an officer of any of the above.

During the calendar  years ended  December  31, 2000 and  December 31, 2001,  no
disinterested  Trustee (or their  immediate  family  members)  had any direct or
indirect  relationship  with (i) All-Star;  (ii) another fund managed by LAMCO,a
portfolio manager or a person controlling, controlled by or under common control
with LAMCO or a portfolio manager;  (iii) LAMCO or a portfolio  manager;  (iv) a
person  controlling,  controlled  by or under  common  control  with  LAMCO or a
portfolio manager; or (v) an officer of any of the above.

During the calendar  years ended  December  31, 2000 and  December 31, 2001,  no
officer of LAMCO, a portfolio manager or any person  controlling,  controlled by
or under common control with LAMCO or a portfolio manager served on the board of
directors of a company where a disinterested Trustee of All-Star or any of their
immediate family members served as an officer.

Approving the Investment Advisory Contracts

In  determining  to approve the most recent annual  extension of the Fund's Fund
Management Agreement and Portfolio Management Agreements,  the Trustees met over
the course of the year with the  relevant  investment  advisory  personnel  from
LAMCO and the Portfolio  Managers and considered  information  provided by LAMCO
and the Portfolio  Managers relating to the education,  experience and number of
investment  professionals  and other  personnel  providing  services  under that
agreement.  See "Management of All-Star" in the Fund's  Prospectus and "Trustees
and  Officers"  in this SAI.  The  Trustees  also took into account the time and
attention  devoted by senior  management of LAMCO and the Portfolio  Managers to
the Fund and the other funds in the complex. The Trustees evaluated the level of
skill required to manage the Fund and concluded that the human resources devoted
by LAMCO and the  Portfolio  Managers  to the Fund were  appropriate  to fulfill
effectively  each of their  duties  under  the  agreements.  The  Trustees  also
considered the business  reputation of LAMCO and the Portfolio Managers and each
of their respective financial  resources,  and concluded that each of them would
be able to meet any reasonably foreseeable obligations under the agreements.

The Trustees  received  information  concerning  the  investment  philosophy and
investment  process applied by LAMCO and the Portfolio  Managers in managing the
Fund. See "Investment  Objective,  Policies and Risks" in the Fund's Prospectus.
In this connection,  the Trustees considered the in-house research  capabilities
of LAMCO and the  Portfolio  Managers as well as other  resources  available  to
their  personnel,  including  research  services  available  to  LAMCO  and  the
Portfolio Managers as a result of securities  transactions effected for the Fund
and other investment  advisory clients.  The Trustees  concluded that investment
process,  research  capabilities  and philosophy of each  Portfolio  Manager and
LAMCO were well suited to the Fund, given the Fund's  investment  objectives and
policies.

The Trustees  considered  the scope of the  services  provided by LAMCO and each
Portfolio Manager to the Fund under the agreements relative to services provided
by third  parties to other  mutual  funds.  See  "Investment  Advisory and Other
Services."  The Trustees  concluded  that the scope of the services  provided by
LAMCO and each  Portfolio  Manager  to the Fund was  consistent  with the Fund's
operational  requirements,  including,  in addition to its investment objective,
compliance  with  the  Fund's   investment   restrictions,   tax  and  reporting
requirements and related shareholder services.

The Trustees  considered the quality of the services  provided by LAMCO and each
Portfolio Manager to the Fund. The Trustees evaluated each of their records with
respect to regulatory  compliance and compliance with the investment policies of
the Fund. The Trustees also evaluated the procedures of LAMCO and each Portfolio
Manager  designed to fulfill  their  fiduciary  duty to the Fund with respect to
possible  conflicts  of  interest,  including  each of  their  codes  of  ethics
(regulating the personal trading of its officers and employees) (see "Investment
Advisory and Other Services"),  the procedures by which LAMCO and each Portfolio
Manager allocates trades among its various  investment  advisory clients and the
record of LAMCO and each Portfolio  Manager in these matters.  The Trustees also
received  information  concerning  standards of LAMCO and each Portfolio Manager
with respect to the execution of portfolio transactions. See "Portfolio Security
Transactions."

The Trustees considered LAMCO's management of non-advisory  services provided by
persons other than LAMCO by reference,  among other things,  to the Fund's total
expenses  and  the  reputation  of  the  Fund's  other  service  providers.  See
"Expenses" in the Fund's  Prospectus.  The Trustees also considered  information
provided by third parties relating to the Fund's investment performance relative
to its  performance  benchmark(s),  relative to other  similar  funds managed by
LAMCO and each  Portfolio  Manager and  relative to funds  managed  similarly by
other  advisors.   The  Trustees  reviewed  performance  over  various  periods,
including the Fund's one,  five and ten year  calendar  year periods  and/or the
life of the Fund,  as applicable  (See  "Investment  Performance"  in the Fund's
Prospectus),  as well as  factors  identified  by LAMCO as  contributing  to the
Fund's performance.  See the Fund's most recent annual and semi-annual  reports.
The Trustees  concluded  that the scope and quality of the services  provided by
LAMCO and each  Portfolio  Manager was  sufficient  to merit  reapproval of each
agreement for another year.

In reaching that conclusion, the Trustees also gave substantial consideration to
the fees  payable  under  the  agreements.  The  Trustees  reviewed  information
concerning  fees paid to investment  advisors of similarly  managed  funds.  The
Trustees  also  considered  the fees of the Fund as a  percentage  of  assets at
different  asset  levels  and  possible  economies  of scale  to LAMCO  and each
Portfolio  Manager.  The  Trustees  evaluated  the  profitability  of LAMCO with
respect to the Fund, concluding that such profitability appeared to be generally
consistent with levels of profitability that had been determined by courts to be
"not excessive." For these purposes, the Trustees took into account not only the
actual  dollar  amount of fees  paid by the Fund  directly  to  LAMCO,  but also
so-called  "fallout  benefits" to the Advisor such as reputational value derived
from serving as fund manager to the Fund and the research services  available to
LAMCO and each Portfolio Manager by reason of brokerage commissions generated by
the Fund's  turnover.  In evaluating the Fund's advisory fees, the Trustees also
took into account the complexity of investment  management for the Fund relative
to other  types of funds.  Based on  challenges  associated  with  less  readily
available market  information  about foreign issuers and smaller  capitalization
companies,  limited  liquidity  of certain  securities,  and the  specialization
required  for focused  funds,  the Trustees  concluded  that  generally  greater
research  intensity  and trading  acumen is required for equity  funds,  and for
international or global funds, as compared to funds investing,  respectively, in
debt obligations or in U.S. issuers. See "The Fund" in the Fund's Prospectus.

Based on the foregoing, the Trustees concluded that the fees to be paid to LAMCO
and  each  Portfolio  Manager  under  the  advisory   agreement  were  fair  and
reasonable,  given the scope and quality of the  services  rendered by LAMCO and
each Portfolio Manager.

General

All-Star's Board of Trustees is divided into three classes,  each of which has a
term of three years  expiring  with the annual  meeting of  shareholders  in the
third year of the term.  All-Star holds annual  meetings of shareholders to vote
on, among other things,  the election or re-election of the Trustees whose terms
are expiring with that meeting. The term or office of Messrs. Birnbaum and Mayer
will expire upon the final  adjournment of the 2002 annual meeting;  the term of
office of Messrs.  Grinnell and Neuhauser will expire upon final  adjournment of
the annual meeting for the year 2003; and the term of office of Mr. Palombo will
expire upon final  adjournment of the annual meeting for the year 2004.  Messrs.
Lowry,  Mayer, and Neuhauser are also Trustees of Liberty Funds Trusts I through
VII (the "Liberty Trusts"),  the umbrella trusts for an aggregate of 49 open-end
funds managed by affiliates of LAMCO,  nine closed-end funds managed by Colonial
(the "Colonial  Closed-End  Funds"),  Liberty  Variable  Investment  Trust,  the
umbrella trust for 17 open-end funds managed by Colonial or its affiliates  that
serve as investment  vehicles for variable annuities and variable life insurance
products;  Liberty Floating Rate Fund; Stein Roe Floating Rate Limited Liability
Company,   Liberty-Stein  Roe  Institutional   Floating  Rate  Income  Fund  and
Liberty-Stein  Roe Funds Income Trust,  Liberty-Stein Roe Funds Municipal Trust,
Liberty-Stein Roe Funds Investment Trust, Liberty-Stein Roe Advisor Trust, Stein
Roe Trust, SR&F Base Trust and Stein Roe Variable Investment Trust, the umbrella
trusts for 42  open-end  funds  managed by Stein Roe & Farnham  Incorporated,  a
LAMCO affiliate.  The All Star's Board of Trustees are also directors of Liberty
All-Star Growth Fund, Inc.,  another  closed-end  multi-managed  fund managed by
LAMCO.

Trustee Compensation

LAMCO or its  affiliates pay the  compensation  of all the officers of All-Star,
including the Trustees who are affiliated with LAMCO. Beginning January 1, 1999,
the  aggregate of the fees paid to the  Trustees by All-Star  that have the same
Board of  Directors  as the Liberty  All-Star  Growth  Fund,  Inc.,  and Liberty
All-Star Growth and Income Fund and hold their meetings  concurrently with those
of the Fund, consists of Trustee fees of $125,000 per annum,  assuming a minimum
of four  meetings  are held and all  meetings  are  attended.  One-third  of the
retainer and the fees for  concurrently  held meetings was  allocated  among the
Fund and the two other funds on a per fund basis,  and the  remaining two thirds
was  allocated  among  the three  funds  based on their  net  assets.  Effective
February  9, 2001,  Liberty  All-Star  Growth and  Income  Fund was merged  into
another  open-end  fund in the Liberty  Trusts and the retainer and meeting fees
will be allocated  between the Fund and Liberty  All-Star Equity Fund. For 2001,
All-Star paid the independent Trustees an aggregate of $[ ]in fees and expenses.

The  following  table  shows,   for  the  year  ended  December  31,  2001,  the
compensation  received from the Fund by each current Trustee,  and the aggregate
compensation  paid to each current  Trustee for service on the Board of Trustees
of the Fund and the two All-Star Funds. The Fund has no bonus, profit sharing or
retirement plans.

<TABLE>
<CAPTION>

                                         Aggregate
                                    Compensation from                       Total Compensation from the
Name                                     the Fund                   Liberty All-Star Funds (including the Fund)
<S>                                     <C>                                           <C>
Robert J. Birnbaum                      $19,186.39                                    $25,300
James E. Grinnell                       $19,186.39                                    $25,300
Richard W. Lowry                        $18,806.88                                    $24,800
William E. Mayer                        $18,806.88                                    $24,800
John J. Neuhauser                       $18,806.88                                    $24,800
Joseph R. Palombo(1)                        N/A                                         N/A
</TABLE>


(1) For  the  fiscal  year  ended  December  31,  Mr.  Palombo  did not  receive
compensation  because he was an  affiliated  Trustee and an employee of LFC,
an affiliate of LAMCO. Mr. Palombo resigned as Trustee of the Liberty All-Star
Funds effective  November 1, 2001.

The following  table shows,  for the calendar year ended  December 31, 2001, the
compensation received from the Liberty Funds by the Trustees.  The Liberty Funds
have no bonus, profit sharing or retirement plans.

<TABLE>
<CAPTION>

Name                                                                  Total Compensation from Liberty Funds

<S>                                                                                  <C>
Robert J. Birnbaum                                                                   $ 25,300
James E. Grinnell(2)                                                                 $100,300
Richard W. Lowry                                                                     $135,300
William E. Mayer                                                                     $135,300
John J. Neuhauser                                                                    $132,510
Joseph R. Palombo(3)                                                                      N/A
</TABLE>
(2)       Resigned as Trustee of the Liberty Funds on December 27, 2000.

(3)       For  the  fiscal  year  ended  December  31,  Mr.  Palombo  did not
          receive compensation because he was an affiliated Trustee and an
          employee of LFC.

                              PORTFOLIO SECURITY TRANSACTIONS

Each of  All-Star's  Portfolio  Managers has  discretion  to select  brokers and
dealers to execute portfolio transactions initiated by the Portfolio Manager for
the portion of All-Star's  portfolio  assets  allocated to it, and to select the
markets in which such transactions are to be executed.  The Portfolio Management
Agreements with All-Star provide, in substance,  that, except as provided in the
following paragraph,  in executing portfolio  transactions and selecting brokers
or dealers,  the primary  responsibility  of the Portfolio Manager is to seek to
obtain best net price and execution for All-Star. It is expected that securities
will ordinarily be purchased in the primary markets,  and that, in assessing the
best net price and execution  available to All-Star,  the Portfolio Manager will
consider all factors it deems  relevant,  including the breadth of the market in
the security,  the price of the security,  the financial condition and execution
capability of the broker or dealer and the reasonableness of the commission,  if
any, for the specific  transaction and on a continuing basis.  Recognizing these
factors, All-Star may pay a brokerage commission in excess of that which another
broker or dealer may have charged for effecting the same transaction.

The  Portfolio  Management  Agreements  also provide that LAMCO has the right to
request that transactions giving rise to brokerage commissions, in amounts to be
agreed  upon  from time to time  between  LAMCO and the  Portfolio  Manager,  be
executed by brokers  and  dealers  (to be agreed upon from time to time  between
LAMCO and the  Portfolio  Manager)  which  provide,  directly  or through  third
parties, research products and services to LAMCO or to All-Star. The commissions
paid on such  transactions  may exceed the amount of commissions  another broker
would have  charged  for  effecting  that  transaction.  Research  products  and
services  made  available  to  LAMCO  through  brokers  and  dealers   executing
transactions for All-Star involving brokerage  commissions include  performance,
portfolio   characteristics,   investment   style  and  other   qualitative  and
quantitative  data relating to investment  managers in general and the Portfolio
Managers in particular;  data relating to the historic performance of categories
of  securities   associated  with  particular  investment  styles;  mutual  fund
portfolio,  performance  and fee and expense  data;  data  relating to portfolio
manager changes by pension plan fiduciaries;  quotation  equipment;  and related
computer  hardware and  software,  all of which are used by LAMCO in  connection
with its selection and monitoring of portfolio managers (including the Portfolio
Managers) for All-Star and other multi-managed clients of LAMCO, the assembly of
a mix of investment styles appropriate to the investment  objectives of All-Star
or such other clients, and the determination of overall portfolio strategies.

LAMCO  from  time to time  reaches  understandings  with  each of the  Portfolio
Managers as to the amount of the All-Star  portfolio  transactions  initiated by
such  Portfolio  Manager  that are to be directed  to brokers and dealers  which
provide  or make  available  research  products  and  services  to LAMCO and the
commissions to be charged to All-Star in connection therewith. These amounts may
differ among the Portfolio  Managers  based on the nature of the markets for the
types of securities managed by them and other factors.

These  research  products and services are used by LAMCO in connection  with its
management of All-Star,  Liberty  All-Star Growth Fund,  Inc.,  Liberty All-Star
Equity  Fund,  Varlable  Series,  and  other  multi-managed  clients  of  LAMCO,
regardless of the source of the brokerage commissions.  In instances where LAMCO
receives  from  broker-dealers  products  or  services  which  are used both for
research purposes and for administrative or other non-research  purposes,  LAMCO
makes a good faith effort to determine the relative proportions of such products
or services which may be considered as investment  research,  based primarily on
anticipated usage, and pays for the costs attributable to the non-research usage
in cash.

The Portfolio Managers are authorized to cause All-Star to pay a commission to a
broker or dealer who provides  research  products and services to the  Portfolio
Manager for executing a portfolio  transaction  which is in excess of the amount
of commission  another  broker or dealer would have charged for  effecting  that
transaction.  The Portfolio Managers must determine in good faith, however, that
such commission was reasonable in relation to the value of the research products
and services provided to them, viewed in terms of that particular transaction or
in  terms  of all the  client  accounts  (including  All-Star)  over  which  the
Portfolio Manager exercises investment  discretion.  It is possible that certain
of the services  received by a Portfolio  Manager  attributable  to a particular
transaction  will  primarily  benefit  one or  more  other  accounts  for  which
investment discretion is exercised by the Portfolio Manager.

During 1999, 2000 and 2001,  All-Star paid total brokerage  commissions of $[ ],
$[ ] and $[ ], respectively. Approximately $[ ] of the commissions paid in 1999,
and $[ ] and $[ ],  respectively,  of the  commissions  paid in 2000 and 2001 on
transactions aggregating approximately $[ ] and $[ ], respectively, were paid to
brokerage  firms  which  provided  or made  available  to  All-Star's  Portfolio
Managers or to LAMCO research products and services as described above.

Although  All-Star  does  not  permit  a  Portfolio  Manager  to act or  have an
affiliate  act as broker for Fund  portfolio  transactions  initiated by it, the
Portfolio Managers are permitted to place Fund portfolio  transactions initiated
by them with  another  Portfolio  Manager  or its  broker-dealer  affiliate  for
execution on an agency basis,  provided the commission does not exceed the usual
and customary  broker's  commission  being paid to other brokers for  comparable
transactions and is otherwise in compliance with Rule 17e-1 under the Investment
Company Act of 1940. [During 1999, 2000 and 2001 no Fund portfolio  transactions
were placed with any Portfolio Manager or its broker-dealer affiliate.]

                                 PRINCIPAL SHAREHOLDERS

On [ ], 2002, Cede & Co. Fast,  Depository Trust Company,  55 Water Street,  New
York, NY 10004 owned  beneficially  [ ] Shares,  representing  [ ] of All-Star's
then outstanding Shares.

                                   FINANCIAL STATEMENTS

[ ], are the  independent  accountants  for the Fund. [ ] provides audit and tax
return  preparation  services and assistance and consultation in connection with
the review of various  Securities  and  Exchange  Commission  filings.  Prior to
September,  1999, [ ] were the independent  auditors for the Fund. The financial
statements incorporated by reference in this SAI have been so incorporated,  and
the financial  statements in the Prospectus  have been so included,  in reliance
upon the reports of [ ] and [ ] given on  authority  of said firms as experts in
accounting  and auditing.  The Fund's Annual Report,  which  includes  financial
statements for the fiscal year ended December 31, 2001, is  incorporated  herein
by reference  with respect to all  information  other than the  information  set
forth on pages [ ] through [ ] thereof.  Any  statement  contained in the Fund's
Annual  Report  that  was  incorporated  herein  shall  be  deemed  modified  or
superseded  for  purposes of the  Prospectus  or this  Statement  of  Additional
Information  to the  extent a  statement  contained  in the  Prospectus  or this
Statement  of  Additional  Information  varies  from  such  statement.  Any such
statement  so  modified  or  superseded  shall  not,  except as so  modified  or
superseded,  be deemed to constitute a part of the  Prospectus or this Statement
of Additional Information.  The Fund will furnish, without charge, a copy of its
Annual Report, upon request to Liberty Asset Management  Company,  One Financial
Center, Boston, Massachusetts 02111, telephone (800) 542-3863.

<PAGE>

PART C.

Other Information.

Item 24. Financial Statements and Exhibits

      (1)  Financial Statements:
                               Included in Part A:

                             Financial statements included in Part A of this
                             registration statement:  Financial Highlights

                               Included in Part B:

                             Financial  statements  included  in  Part B - to
                             be filed by Amendment

      (2)  Exhibits

             (a)(1)          Amended and Restated Declaration of Trust*

             (a)(2)          Amendment to Declaration of Trust dated 5/11/93*

             (b)             Amended By-Laws

             (c)             Not Applicable

             (d)(1)          Form of  Specimen Certificate for Shares of
                             Beneficial Interest*

             (d)(2)          Form of Subscription Certificate*

             (d)(3)          Form of Notice of Guaranteed Delivery*

             (e)             Automatic Dividend Reinvestment and Cash
                             Purchase Plan Brochure, as amended(1)

             (f)             Not Applicable

             (g)(1)          Fund Management Agreement between Registrant and
                             Liberty Asset Management Company dated 11/1/01

             (g)(2)          Portfolio Management Agreement between Registrant,
                             Liberty AssetManagement Company and Boston
                             Partners Asset Management, L.P. dated 11/1/01

             (g)(3)          Portfolio Management Agreement between Registrant,
                             Liberty Asset Management Company and Mastrapasqua
                             & Associates, Inc. dated 11/1/01

             (g)(4)          Portfolio Management Agreement between Registrant,
                             Liberty Asset Management Company and TCW
                             Investment Management Company dated 11/1/01

             (g)(5)          Portfolio Management Agreement between Registrant,
                             Liberty Asset Management Company and Oppenheimer
                             Capital dated 11/1/01

             (g)(6)          Portfolio Management Agreement between Registrant,
                             Liberty Asset Management Company and Westwood
                             Management Corporation dated 11/1/01

             (g)(7)          Portfolio Management Agreement between Registrant,
                             Liberty Asset Management Company and Schneider
                             Capital Management Corporation*

             (h)             Not Applicable

             (i)             Not Applicable

             (j)(1)          Form of Custodian Agreement with State Street
                             Bank and Trust Company dated October 10, 2001 -
                             filed as Exhibit (g) in Part C, Item 23 of Post-
                             Effective Amendment No. 56 to the Registration
                             Statement on Form N-1A of Liberty Funds Trust II
                             (File Nos. 2-66976 & 811-3009), filed with the
                             Commission on or about October 26, 2001, and is
                             hereby incorporated by reference and made a part
                             of this Registration Statement

             (k)(1)          Registrar, Transfer Agency and Service Agreement
                             between Registrant and State Street Bank & Trust
                             Company dated 10/1/86*

             (k)(2)          Pricing and Bookkeeping Agreement between
                             Registrant and Colonial Management Associates,
                             Inc. dated 1/1/96 (1)

             (k)(3)          Form of Amendment dated 7/1/01 to Pricing and
                             Bookkeeping Agreement between Registrant and
                             Colonial Management Associates, Inc.

             (k)(4)          Form of Subscription Agreement between Registrant
                             and EquiServe Trust Company, N.A.*

             (k)(5)          Form of Information Agent Agreement between
                             Registrant and Georgeson Shareholder
                             Communications, Inc.*

             (l)             Opinion and Consent of Counsel*

             (m)             Not Applicable

             (n)             Consent of Independent Accountants*

             (o)             Not Applicable

             (p)             Not Applicable

             (q)             Not Applicable

             (r)             Code of Ethics - filed in Part C, Item 23 of
                             Post-Effective Amendment No. 56 to the Registration
                             Statement on Form N-1A of Liberty Funds Trust II
                             (File Nos. 2-66976 & 811-3009), filed with the
                             Commission  on or about October 26, 2001, and is
                             hereby incorporated and made a part of this
                             Registration  Statement

- -------------------------------------------------------------------------------

Power of Attorney  for: Robert J. Birnbaum, James E. Grinnell, Richard W. Lowry,
William E. Mayer, John J. Neuhauser and Joseph R. Palombo


- ---------------------------------------------------------------------------

*To be filed by Amendment.

(1)  Incorporated by reference to the Registration Statement on Form N-2
     filed with the Commission on February 23, 1998.


Item 25.  Marketing Arrangements

     Not Applicable.

Item 26.  Other Expenses of Issuance and Distribution

     The following table sets forth the expenses to be incurred in connection
     with the offering described in this Registration Statement:

     Registration fee                                    $ 11,500
     New York Stock Exchange listing fee                   38,500
     Printing                                              25,000
     Accounting fees and expenses                           7,000
     Legal fees and expenses                               50,000
     Information Agent fees and expenses                   13,000
     Subscription Agent fees and expenses                  90,000
     Miscellaneous                                         80,000
                                                         ----------
                    Total                                $315,000
                                                         ==========

Item 27.  Persons Controlled By or Under Common Control with Registrant


     None.



<PAGE>


Item 28.  Number of Holders of Securities

           Number of Record Holders
            as of 1/31/02: 6,300


Item 29.  Indemnification

                 See Article V to the Amended Declaration of Trust as filed
                 as Exhibit (a)(1) hereto.

                 The Registrant,  its advisor, Liberty Asset Management Company,
                 and its Administrator,  Colonial  Management  Associates,  Inc.
                 (Colonial),  and  their  respective  trustees,   directors  and
                 officers  are insured by a Directors  and  Officers/Errors  and
                 Omissions   Liability   insurance  policy  through  ICI  Mutual
                 Insurance Company.  The policy provides indemnification to
                 the Registrant's Trustees and Officers.


ITEM 30.  Business and Other Connections of Investment Adviser.

Liberty Asset Management Company ("LAMCO"), the Registrant's
Fund Manager, was organized on August 16, 1985 and is primarily engaged in the
corporate administration of and the provision of its multi-management services
for the Registrant and Liberty All-Star Growth Fund, Inc., another
multi-managed closed-end investment company.  It also provides its multi-
management services to Liberty All-Star Equity Fund, Variable Series, a multi-
managed open-end investment company which serves as an investment vehicle for
variable annuity contracts issued by affiliated insurance companies.  As of
December 31, 2001, LAMCO had $1.4 billion assets under management.

The following sets forth the business and other connections of each director
and officer of LAMCO:

<TABLE>
<CAPTION>
<S>                                <C>                          <C>                                       <C>

(1)                                (2)                          (3)                                       (4)
Name and principal
business
addresses*                         Affiliation
of officers and                    with                         Other business, profession,
directors of                       investment                   vocation or employment
investment adviser                 adviser                      connection                                Affiliation
- ------------------                 ----------                   ------------------------------            -----------

Banks, Keith T.                    Director                     Liberty Variable Investment Trust         President


Palombo, Joseph R.                 Director                     Liberty Variable Investment Trust         Trustee


Sayler, Roger                      Director                     None

Parmentier, Jr., William R.        President, Chief             Liberty All-Star Growth Fund, Inc.        Pres., Chief
                                   Executive Officer &                                                    Exec. Officer &
                                   Chief Investment Officer                                               Chief Investment
                                                                                                          Officer

Carabell, Christopher S.           Senior Vice President        Liberty All-Star Growth Fund, Inc.        Vice President

Mark T. Haley                      Vice President               Liberty All-Star Growth Fund, Inc.        Vice President

Loewenberg, Jean S.                Secretary                    Liberty Variable Investment Trust         Secretary
                                                                Liberty All-Star Growth Fund, Inc.        Secretary

Iudice, Philip J., Jr.             Treasurer                    None

</TABLE>

- --------------------------------
*The principal address of the officers and directors of the Investment Adviser
 is One Financial Center, Boston, MA 02111.


Item 31.      Location of Accounts and Records:

              Registrant  maintains the records  required to be maintained by it
              under Rules 31a-1(a),  31a-1(b), and 31a-2(a) under the Investment
              Company  Act of 1940 at its  principal  executive  offices  at One
              Financial  Center,  Boston, MA 02111.  Certain records,  including
              records  relating to  Registrant's  shareholders  and the physical
              possession of its securities,  may be maintained  pursuant to Rule
              31a-3  at the  main  office  of  Registrant's  transfer  agent  or
              custodian.

Item 32.      Management Services

              None

Item 33.      Undertakings


              (1)  The Registrant undertakes to suspend the offering of shares
                   until the prospectus is amended, if subsequent to the
                   effective date of this Registration Statement, its net
                   asset value declines more than ten percent from its net
                   asset value, as of the effective date of the Registration
                   Statement or its net asset value increases to an amount
                   greater than its net proceeds as stated in the prospectus.

              (2)  Not applicable.

              (3)  Not applicable.

              (4)  Not applicable.

              (5)  Registrant undertakes that, for the purpose of determining
                   any liability under the Securities Act, the information
                   omitted from the form of prospectus filed as part of the
                   Registration Statement in reliance upon Rule 430A and
                   contained in the form of prospectus filed by the Registrant
                   pursuant to Rule 497(h) will be deemed to be a part of the
                   Registration Statement as of the time it was declared
                   effective.

                   Registrant undertakes that, for the purpose of determining
                   any liability under the Securities Act, each post-effective
                   amendment that contains a form of prospectus will be deemed
                   to be a new Registration Statement relating to the
                   securities offered therein, and the offering of such
                   securities at that time will be deemed to be the initial
                   bona fide offering thereof.

              (6)  Registrant undertakes to send by first class mail or other
                   means designed to ensure equally prompt delivery, within
                   two business days of receipt of a written or oral request,
                   any Statement of Additional Information constituting Part B
                   of this Registration Statement.



<PAGE>

                             SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,  and the
Investment  Company Act of 1940, as amended,  the  Registrant has duly caused
this  Amendment to its Registration  Statement  on Form N-2 to be  signed  on
its  behalf  by the undersigned,   thereunto  duly  authorized,  in  the  City
of Boston  and  the Commonwealth of Massachusetts on the 22nd day of February,
2002.

                                             LIBERTY ALL-STAR EQUITY FUND


                                             /s/ WILLIAM R. PARMENTIER, JR.
                                       By:   ------------------------------
                                             /s/ William R. Parmentier, Jr.
                                                 President, Chief Executive
                                                 Officer & Chief Investment
                                                 Officer

Pursuant to the  requirements of the Securities Act of 1933,  this  Registration
Statement has been signed below by the following persons in their capacities and
on the date indicated.

SIGNATURES                              TITLE                 DATE
- ----------                              -----                 ----




/s/WILLIAM R. PARMENTIER, JR.       President (chief          February 22, 2002
- -----------------------------       executive officer)
/s/William R. Parmentier, Jr.


/s/J. KEVIN CONNAUGHTON             Treasurer                 February 22, 2002
- -----------------------              (principal financial officer)
/s/J. Kevin Connaughton

/s/ VICKI L. BENJAMIN               Chief Accounting Officer  February 22, 2002
- ---------------------                 (principal accounting officer)
/s/Vicki L. Benjamin

<PAGE>

ROBERT R. BIRNBAUM*     Trustee
- ------------------
Robert R. Birnbaum


JAMES E. GRINNELL*      Trustee
- ---------------------
James E. Grinnell


RICHARD W. LOWRY*       Trustee                       */s/ ROBERT R. LEVEILLE
- -----------------                                      ----------------------
Richard W. Lowry                                           Robert R. Leveille
                                                           Attorney-in-fact
                                                           For each Trustee
                                                           February 22, 2002

WILLIAM E. MAYER*      Trustee
- -----------------
William E. Mayer


JOHN J. NEUHAUSER*     Trustee
- ------------------
John J. Neuhauser





<PAGE>


            INDEX OF EXHIBITS FILED WITH THIS AMENDMENT

Exhibit
Number    Exhibit
- --------  --------------------------------------------------

(b)       By-Laws
(g)(1)    Fund Management Agreement with Liberty Asset Management Company
(g)(2)    Portfolio Management Agreement with Boston Partners Asset
            Management, L.P.
(g)(3)    Portfolio Management Agreement with Mastrapasqua & Associates, Inc.
(g)(4)    Portfolio Management Agreement with TCW Investment Management
            Company
(g)(5)    Portfolio Management Agreement with Oppenheimer Capital
(g)(6)    Portfolio Management Agreement with Westwood Management Corporation
(k)(3)    Form of Amendment to Pricing and Bookkeeping Agreement

          Power of Attorneys





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2K
<SEQUENCE>2
<FILENAME>book.txt
<DESCRIPTION>AMENDMENT TO PRICING & BOOKKEEPING
<TEXT>
               FORM OF AMENDMENT TO PRICING AND BOOKKEEPING AGREEMENT

         This Amendment is made and entered into this 1st day of July, 2001 by
 and between Liberty All-Star Equity Fund (the "Fund") and Colonial
Management Associates, Inc. ("Colonial"), a Massachusetts corporation.

         WHEREAS, the Fund and Colonial previously entered into a Pricing and
Bookkeeping Agreement dated January 1, 1996, as amended (the "Agreement"); and

         WHEREAS, the parties desire to amend the compensation provision of the
 Agreement and add provision that allows Colonial to delegate its
responsibilities under the Agreement.

         NOW, THEREFORE, in consideration of the mutual covenants and
agreements of the parties hereto as herein set forth, the parties covenant and
agree as follows:

1.       Paragraph 4 (Compensation) of the Agreement is amended and restated in
its entirety as follows:

               "4.  Compensation.  The Fund will pay Colonial a monthly fee
                    consisting of a Flat Fee plus an Asset-Based Fee, as
                    follows:

                  (a) "Flat Fee."  An annual fee of $10,000, paid monthly; plus

                  (b) "Asset-Based Fee."  For any month that the Fund has
                       average net assets of more than $50 million, a
                       fee equal to the average net assets of the Fund for that
                       month multiplied by the Asset-Based Fee
                       Rate.  The "Asset-Based Fee Rate" shall be calculated as
                       follows:

                       [(2 x $105,000) - (2 x $10,000)]   /   (average monthly
                        net assets of the Fund plus average
                        month net assets of the Liberty All-Star Growth Fund)

               The Fund also shall reimburse Colonial for any and all
               out-of-pocket expenses and charges, including fees
               payable to third parties for pricing the Fund's portfolio
               securities, in performing services under this Agreement."

2.       The following provision shall be added as paragraph 10 of the
         Agreement:

               "10.  Use of Affiliated Companies and Subcontractors.  In
                     connection with the services to be provided by Colonial
                     under this Agreement, Colonial may, to the extent it deems
                     appropriate, and subject to compliance with the
                     requirements of applicable laws and regulations and upon
                     receipt of approval of the Trustees, make use of (i) its
                     affiliated companies and their directors, trustees,
                     officers, and employees and (ii) subcontractors selected
                     by Colonial, provided that Colonial shall supervise and
                     remain fully responsible for the services of all such
                     third parties in accordance with and to the extent
                     provided by this Agreement.  Except as otherwise provided
                     in paragraph 4 herein, all costs and expenses associated
                     with services provided by any such third parties shall be
                     borne by Colonial or such parties."

         A copy of the  document  establishing  the Trust is filed  with the
         Secretary  of The  Commonwealth  of  Massachusetts.  This Agreement is
         executed by officers not as  individuals  and is not binding upon any
         of the Trustees,  officers or  shareholders of the Trust individually
         but only upon the assets of the Fund.

         IN WITNESS WHEREOF,  the parties hereto, intending to be legally bound
hereby,  have executed and delivered this Agreement as of the date first
written above.




                                            LIBERTY ALL-STAR EQUITY FUND

                                            By:_______________________________
                                                     Name:
                                                     Title:

                                            COLONIAL MANAGEMENT ASSOCIATES, INC.

                                            By:_______________________________
                                                     Name:
                                                     Title:
























S:\STAFF\Kane\Agreements\P&BAmend4.doc


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2G
<SEQUENCE>3
<FILENAME>bppm.txt
<DESCRIPTION>PORTFOLIO MANAGEMENT AGREEMENT W/BOSTON PARTNERS
<TEXT>
                         PORTFOLIO MANAGEMENT AGREEMENT

                                November 1, 2001

Boston Partners Asset Management, L.P.
28 State Street
Boston, MA  02109

Re: Portfolio Management Agreement

Ladies and Gentlemen:

    Liberty All-Star Equity Fund (the "Fund") is a diversified closed-end
investment company registered under the Investment Company Act of 1940 (the
"Act"), and is subject to the rules and regulations promulgated thereunder.

    Liberty Asset Management Company (the "Fund Manager") evaluates and
recommends portfolio managers for the assets of the Fund, and is responsible for
the day-to-day corporate management and Fund administration of the Fund.

    1. Employment as a Portfolio Manager. The Fund being duly authorized hereby
employs Boston Partners Asset Management, L.P. (the "Portfolio Manager") as a
discretionary portfolio manager, on the terms and conditions set forth herein,
of that portion of the Fund's assets which the Fund Manager determines to assign
to the Portfolio Manager (those assets being referred to as the "Portfolio
Manager Account"). The Fund Manager may, from time to time, allocate and
reallocate the Fund's assets among the Portfolio Manager and the other portfolio
managers of the Fund's assets.

    2. Acceptance of Employment; Standard of Performance. The Portfolio Manager
accepts its employment as a discretionary portfolio manager and agrees to use
its best professional judgment to make timely investment decisions for the
Portfolio Manager Account in accordance with the provisions of this Agreement.

    3. Portfolio Management Services of Portfolio Manager. In providing
portfolio management services to the Portfolio Manager Account, the Portfolio
Manager shall be subject to the investment objectives, policies and restrictions
of the Fund as set forth in its current Registration Statement under the Act, as
the same may be modified from time to time (the "Registration Statement"), and
the investment restrictions set forth in the Act and the Rules thereunder (as
and to the extent set forth in the Registration Statement or in other
documentation furnished to the Portfolio Manager by the Fund or the Fund
Manager), to the supervision and control of the Board of Trustees of the Fund,
and to instructions from the Fund Manager. The Portfolio Manager shall not,
without the prior approval of the Fund or the Fund Manager, effect any
transactions which would cause the Portfolio Manager Account, treated as a
separate fund, to be out of compliance with any of such restrictions or
policies.

    4. Transaction Procedures. All portfolio transactions for the Portfolio
Manager Account will be consummated by payment to or delivery by the custodian
of the Fund (the "Custodian"), or such depositories or agents as may be
designated by the Custodian in writing, as custodian for the Fund, of all cash
and/or securities due to or from the Portfolio Manager Account, and the
Portfolio Manager shall not have possession or custody thereof or any
responsibility or liability with respect to such custody. The Portfolio Manager
shall advise and confirm in writing to the Custodian all investment orders for
the Portfolio Manager Account placed by it with brokers and dealers at the time
and in the manner set forth in Schedule A hereto (as amended from time to time
by the Fund Manager). The Fund shall issue to the Custodian such instructions as
may be appropriate in connection with the settlement of any transaction
initiated by the Portfolio Manager. The Fund shall be responsible for all
custodial arrangements and the payment of all custodial charges and fees, and,
upon giving proper instructions to the Custodian, the Portfolio Manager shall
have no responsibility or liability with respect to custodial arrangements or
the acts, omissions or other conduct of the Custodian.

    5. Allocation of Brokerage. The Portfolio Manager shall have authority and
discretion to select brokers and dealers to execute portfolio transactions
initiated by the Portfolio Manager for the Portfolio Manager Account, and to
select the markets on or in which the transaction will be executed.

        A. In doing so, the Portfolio Manager's primary responsibility shall be
    to seek to obtain best net price and execution for the Fund. However, this
    responsibility shall not obligate the Portfolio Manager to solicit
    competitive bids for each transaction or to seek the lowest available
    commission cost to the Fund, so long as the Portfolio Manager reasonably
    believes that the broker or dealer selected by it can be expected to obtain
    a "best execution" market price on the particular transaction and determines
    in good faith that the commission cost is reasonable in relation to the
    value of the brokerage and research services (as defined in Section 28(e)(3)
    of the Securities Exchange Act of 1934) provided by such broker or dealer to
    the Portfolio Manager viewed in terms of either that particular transaction
    or of the Portfolio Manager's overall responsibilities with respect to its
    clients, including the Fund, as to which the Portfolio Manager exercises
    investment discretion, notwithstanding that the Fund may not be the direct
    or exclusive beneficiary of any such services or that another broker may be
    willing to charge the Fund a lower commission on the particular transaction.

        B. Subject to the requirements of paragraph A above, the Fund Manager
    shall have the right to request that transactions giving rise to brokerage
    commissions, in an amount to be agreed upon by the Fund Manager and the
    Portfolio Manager, shall be executed by brokers and dealers that provide
    brokerage or research services to the Fund Manager, or as to which an
    on-going relationship will be of value to the Fund in the management of its
    assets, which services and relationship may, but need not, be of direct
    benefit to the Portfolio Manager Account. Notwithstanding any other
    provision of this Agreement, the Portfolio Manager shall not be responsible
    under paragraph A above with respect to transactions executed through any
    such broker or dealer.

        C. The Portfolio Manager shall not execute any portfolio transactions
    for the Portfolio Manager Account with a broker or dealer which is an
    "affiliated person" (as defined in the Act) of the Fund, the Portfolio
    Manager or any other Portfolio Manager of the Fund without the prior written
    approval of the Fund. The Fund Manager will provide the Portfolio Manager
    with a list of brokers and dealers which are "affiliated persons" of the
    Fund or its Portfolio Managers.

    6. Proxies. The Portfolio Manager will vote all proxies solicited by or with
respect to the issuers of securities in which assets of the Portfolio Manager
Account may be invested from time to time in accordance with such policies as
shall be determined by the Fund Manager.

    7. Fees for Services. The compensation of the Portfolio Manager for its
services under this Agreement shall be calculated and paid by the Fund Manager
in accordance with the attached Schedule C. Pursuant to the Fund Management
Agreement between the Fund and the Fund Manager, the Fund Manager is solely
responsible for the payment of fees to the Portfolio Manager, and the Portfolio
Manager agrees to seek payment of its fees solely from the Fund Manager.

    8. Other Investment Activities of Portfolio Manager. The Fund acknowledges
that the Portfolio Manager or one or more of its affiliates has investment
responsibilities, renders investment advice to and performs other investment
advisory services for other individuals or entities ("Client Accounts"), and
that the Portfolio Manager, its affiliates or any of its or their directors,
officers, agents or employees may buy, sell or trade in any securities for its
or their respective accounts ("Affiliated Accounts"). Subject to the provisions
of paragraph 2 hereof, the Fund agrees that the Portfolio Manager or its
affiliates may give advice or exercise investment responsibility and take such
other action with respect to other Client Accounts and Affiliated Accounts which
may differ from the advice given or the timing or nature of action taken with
respect to the Portfolio Manager Account, provided that the Portfolio Manager
acts in good faith, and provided further, that it is the Portfolio Manager's
policy to allocate, within its reasonable discretion, investment opportunities
to the Portfolio Manager Account over a period of time on a fair and equitable
basis relative to the Client Accounts and the Affiliated Accounts, taking into
account the cash position and the investment objectives and policies of the Fund
and any specific investment restrictions applicable thereto. The Fund
acknowledges that one or more Client Accounts and Affiliated Accounts may at any
time hold, acquire, increase, decrease, dispose of or otherwise deal with
positions in investments in which the Portfolio Manager Account may have an
interest from time to time, whether in transactions which involve the Portfolio
Manager Account or otherwise. The Portfolio Manager shall have no obligation to
acquire for the Portfolio Manager Account a position in any investment which any
Client Account or Affiliated Account may acquire, and the Fund shall have no
first refusal, co-investment or other rights in respect of any such investment,
either for the Portfolio Manager Account or otherwise.

    9. Limitation of Liability. The Portfolio Manager shall not be liable for
any action taken, omitted or suffered to be taken by it in its reasonable
judgment, in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement, or in
accordance with (or in the absence of) specific directions or instructions from
the Fund, provided, however, that such acts or omissions shall not have resulted
from the Portfolio Manager's willful misfeasance, bad faith or gross negligence,
a violation of the standard of care established by and applicable to the
Portfolio Manager in its actions under this Agreement or breach of its duty or
of its obligations hereunder (provided, however, that the foregoing shall not be
construed to protect the Portfolio Manager from liability in violation of
Section 17(i) of the Act).

    10. Confidentiality. Subject to the duty of the Portfolio Manager and the
Fund to comply with applicable law, including any demand of any regulatory or
taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Portfolio Manager Account and the
actions of the Portfolio Manager and the Fund in respect thereof.

    11. Assignment. This Agreement shall terminate automatically in the event of
its assignment, as that term is defined in Section 2(a)(4) of the Act. The
Portfolio Manager shall notify the Fund in writing sufficiently in advance of
any proposed change of control, as defined in Section 2(a)(9) of the Act, as
will enable the Fund to consider whether an assignment as defined in Section
2(a)(4) of the Act will occur, and whether to take the steps necessary to enter
into a new contract with the Portfolio Manager.

     12.  Representations,  Warranties  and  Agreements  of the  Fund.  The Fund
represents, warrants and agrees that:

          A. The Portfolio Manager has been duly appointed to provide investment
     services to the Portfolio Manager Account as contemplated hereby.

          B. The Fund will deliver to the Portfolio  Manager a true and complete
     copy of its then current  registration  statement as effective from time to
     time and such other documents  governing the investment of the Fund Account
     and such other  information  as is necessary for the  Portfolio  Manager to
     carry out its obligations under this Agreement.

     13.  Representations,  Warranties and Agreements of the Portfolio  Manager.
The Portfolio Manager represents, warrants and agrees that:

          A. It is registered as an  "Investment  Adviser"  under the Investment
     Advisers Act of 1940 ("Advisers Act").

          B. It will maintain,  keep current and preserve on behalf of the Fund,
     in the manner  required or permitted  by the Act and the Rules  thereunder,
     the records  identified  in Schedule B (as  Schedule B may be amended  from
     time to time by the Fund Manager).  The Portfolio  Manager agrees that such
     records are the property of the Fund,  and will be  surrendered to the Fund
     promptly upon request.

          C.  It  will  adopt  a  written  code of  ethics  complying  with  the
     requirements of Rule 17j-1 under the 1940 Act. Within 45 days of the end of
     each year while this Agreement is in effect,  an officer or general partner
     of the  Portfolio  Manager  shall  certify  to the Fund that the  Portfolio
     Manager  has  complied  with the  requirements  of Rule  17j-1  during  the
     previous  year and that there has been no  violation  of its code of ethics
     or, if such a violation has occurred,  that appropriate action was taken in
     response to such violation.

          D. Upon request,  the Portfolio  Manager will promptly supply the Fund
     with any information concerning the Portfolio Manager and its stockholders,
     employees  and  affiliates  which  the  Fund  may  reasonably   require  in
     connection with the preparation of its Registration Statement or amendments
     thereto,  proxy material,  reports and other documents required to be filed
     under the Act, the Securities Act of 1933, or other  applicable  securities
     laws.

          E.  Reference is hereby made to the  Declaration of Trust dated August
     20,  1986  establishing  the Fund,  a copy of which has been filed with the
     Secretary of the Commonwealth of Massachusetts and elsewhere as required by
     law, and to any and all amendments thereto so filed or hereafter filed. The
     name  Liberty  All-Star  Equity  Fund  refers to the  Trustees  under  said
     Declaration  of Trust,  as  Trustees  and not  personally,  and no Trustee,
     shareholder,  officer,  agent or  employee of the Fund shall be held to any
     personal liability hereunder or in connection with the affairs of the Fund,
     but only the trust estate under said  Declaration  of Trust is liable under
     this Agreement.  Without limiting the generality of the foregoing,  neither
     the  Portfolio  Manager  nor  any of  its  officers,  directors,  partners,
     shareholders or employees shall, under any circumstances,  have recourse or
     cause or willingly  permit recourse to be had directly or indirectly to any
     personal,  statutory,  or  other  liability  of any  shareholder,  Trustee,
     officer,  agent or  employee of the Fund or of any  successor  of the Fund,
     whether  such  liability  now exists or is  hereafter  incurred  for claims
     against the trust estate,  but shall look for payment  solely to said trust
     estate, or the assets of such successor of the Fund.

    14. Amendment. This Agreement may be amended at any time, but only by
written agreement among the Portfolio Manager, the Fund Manager and the Fund,
which amendment, other than amendments to Schedules A and B, is subject to the
approval of the Board of Trustees and the Shareholders of the Fund as and to the
extent required by the Act.

    15. Effective Date; Term. This Agreement shall continue until July 31, 2003
and from year to year thereafter provided such continuance is specifically
approved at least annually by (i) the Fund's Board of Trustees or (ii) a vote of
a "majority" (as defined in the Act) of the Fund's outstanding voting
securities, provided that in either event such continuance is also approved by a
majority of the Board of Trustees who are not "interested persons" (as defined
in the Act) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval and provided further that, in
accordance with the conditions of the application of the Fund and Fund Manager
for an exemption from 15(a) of the Act (Rel. Nos. IC 19436 and 19491), the
continuance of this Agreement shall be subject to approval by such "majority" of
the Fund's outstanding voting securities at the regularly scheduled annual
meeting of shareholders of the Fund next following the date of this Agreement.
The aforesaid requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner consistent with the
Act and the Rules and Regulations thereunder.

    16. Termination. This Agreement may be terminated by any party, without
penalty, immediately upon written notice to the other parties in the event of a
breach of any provision thereof by a party so notified, or otherwise upon not
less than thirty (30) days' written notice to the Portfolio Manager in the case
of termination by the Fund or the Fund Manager, or ninety (90) days' written
notice to the Fund and the Fund Manager in the case of termination by the
Portfolio Manager, but any such termination shall not affect the status,
obligations or liabilities of any party hereto to the other parties.

    17. Applicable Law. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter enacted, as
the same may be amended from time to time, this Agreement shall be administered,
construed and enforced according to the laws of the Commonwealth of
Massachusetts.

    18. Severability. If any term or condition of this Agreement shall be
invalid or unenforceable to any extent or in any application, then the remainder
of this Agreement, and such term or condition except to such extent or in such
application, shall not be affected thereby, and each and every term and
condition of this Agreement shall be valid and enforced to the fullest extent
and in the broadest application permitted by law.


                                 LIBERTY ALL-STAR EQUITY FUND

                                 By: ________________________________________
                                 Title:

                                 LIBERTY ASSET MANAGEMENT COMPANY

                                 By: ________________________________________
                                 Title:

ACCEPTED:

BOSTON PARTNERS ASSET MANAGEMENT, L.P.

By: ________________________________________
Title:

BOSTON PARTNERS ASSET MANAGEMENT, L.P.

By: ________________________________________
Title:



SCHEDULES:      A.   Operational Procedures For Portfolio Transactions [omitted]
                B.   Record Keeping Requirements
                C.   Fee Schedule


<PAGE>


                          LIBERTY ALL-STAR EQUITY FUND

                         Portfolio Management Agreement
                                   SCHEDULE B

RECORDS TO BE MAINTAINED BY THE PORTFOLIO MANAGER

1. (Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all other
   portfolio purchases and sales, given by the Portfolio Manager on behalf of
   the Fund for, or in connection with, the purchase or sale of securities,
   whether executed or unexecuted. Such records shall include:

    A. The name of the broker;

    B. The terms and conditions of the order and of any modifications or
       cancellation thereof;

    C. The time of entry or cancellation;

    D. The price at which executed;

    E. The time of receipt of a report of execution; and

    F. The name of the person who placed the order on behalf of the Fund.

2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within ten
   (10) days after the end of the quarter, showing specifically the basis or
   bases upon which the allocation of orders for the purchase and sale of
   portfolio securities to named brokers or dealers was effected, and the
   division of brokerage commissions or other compensation on such purchase and
   sale orders. Such record:

    A. Shall include the consideration given to:

        (i)The sale of shares of the Fund by brokers or dealers.

       (ii)The supplying of services or benefits by brokers or dealers to:

            (a) The Fund;

            (b) The Manager (Liberty Asset Management Company);

            (c) The Portfolio Manager; and

            (d) Any person other than the foregoing.

      (iii)Any other consideration other than the technical qualifications of
           the brokers and dealers as such.

    B. Shall show the nature of the services or benefits made available.

    C. Shall describe in detail the application of any general or specific
       formula or other determinant used in arriving at such allocation of
       purchase and sale orders and such division of brokerage commissions or
       other compensation.

    D. The name of the person  responsible for making the  determination of such
       allocation and such division of brokerage commissions or other
       compensation.

3. (Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum
   identifying the person or persons, committees or groups authorizing the
   purchase or sale of portfolio securities. Where an authorization is made by a
   committee or group, a record shall be kept of the names of its members who
   participate in the authorization. There shall be retained as part of this
   record: any memorandum, recommendation or instruction supporting or
   authorizing the purchase or sale of portfolio securities and such other
   information as is appropriate to support the authorization.1

4. (Rule 31a-1(f)) Such accounts, books and other documents as are required to
   be maintained by registered investment advisers by rule adopted under Section
   204 of the Investment Advisers Act of 1940, to the extent such records are
   necessary or appropriate to record the Portfolio Manager's transactions with
   the Fund.

- ----------
1    Such information might include: the current Form 10-K, annual and quarterly
     reports,  press  releases,  reports by analysts  and from  brokerage  firms
     (including  their  recommendation:  i.e., buy, sell,  hold) or any internal
     reports or portfolio manager reviews.


<PAGE>



                                   SCHEDULE C

                              PORTFOLIO MANAGER FEE

    For services provided to the Fund Account, the Fund Manager will pay to the
Portfolio Manager, on or before the 10th day of each calendar month, a monthly
fee for the previous calendar month in the amount of 1/12(th) of: 0.40% of the
amount obtained by multiplying the Portfolio Manager's Percentage (as
hereinafter defined) times the Average Total Fund Net Assets (as hereinafter
defined) up to $400 million; 0.36% of the amount obtained by multiplying the
Portfolio Manager's Percentage times the Average Total Fund Net Assets exceeding
$400 million up to and including $800 million; 0.324% of the amount obtained by
multiplying the Portfolio Manager's Percentage times the Average Total Fund Net
Assets exceeding $800 million up to and including $1.2 billion; 0.292% of the
amount obtained by multiplying the Portfolio Manager's Percentage times the
Average Total Fund Net Assets exceeding $1.2 billion.

    "Portfolio Manager's Percentage" means the percentage obtained by dividing
(i) the average of the net asset values of the Fund Account as of the close of
the last business day of the New York Stock Exchange in each calendar week
during the preceding calendar month, by (ii) the Average Total Fund Net Assets.

    "Average Total Fund Net Assets" means the average of the net asset values of
the Fund as a whole as of the close of the last business day of the New York
Stock Exchange in each calendar week during the preceding calendar month.

    The fee shall be pro-rated for any month during which this Agreement is in
effect for only a portion of the month.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2G
<SEQUENCE>4
<FILENAME>manage.txt
<DESCRIPTION>FUND MANAGEMENT AGREEMENT W/LAMCO
<TEXT>
                          LIBERTY ALL-STAR EQUITY FUND

                            FUND MANAGEMENT AGREEMENT

FUND MANAGEMENT AGREEMENT dated November 1, 2001, between Liberty All-Star
Equity Fund, a business trust organized under the laws of the Commonwealth of
Massachusetts (the "Company"), and Liberty Asset Management Company, a
corporation organized under the laws of the State of Delaware ("Manager").

WHEREAS the Company has been organized by the Manager and will operate as an
investment company registered under the Investment Company Act of 1940
("Investment Company Act") for the purpose of investing and reinvesting its
assets in securities pursuant to the investment objectives, policies and
restrictions set forth in its Declaration of Trust, its By-Laws and its
Registration Statement under the Investment Company Act and the Securities Act
of 1933, all as heretofore amended and supplemented; and the Company desires to
avail itself of the services, information, advice, assistance and facilities of
the Manager and to have the Manager provide or perform for it various
administrative, management and other services; and

WHEREAS the Manager is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended, and desires to provide services to the Trust
in consideration of and on the terms and conditions hereinafter set forth;

NOW, THEREFORE, the Company and the Manager agree as follows:

1. Employment of the Manager. The Company hereby employs the Manager to manage
the investment and reinvestment of the Company's assets in the manner set forth
in Section 2(B) of this Agreement, to administer its business and administrative
operations as set forth in Section 2(A) of this Agreement, and to provide the
other services set forth in Section 2 of this Agreement, subject to the
direction of the Trustees and the officers of the Company, for the period, in
the manner, and on the terms hereinafter set forth. The Manager hereby accepts
such employment and agrees during such period to render the services and to
assume the obligations herein set forth. The Manager shall for all purposes
herein be deemed to be an independent contractor and shall, except as expressly
provided or authorized (whether herein or otherwise), have no authority to act
for or represent the Company in any way or otherwise be deemed an agent of the
Company.

2.  Obligation  of and  Services  to be  Provided  by the  Manager.  The Manager
undertakes  to  provide  the  services  hereinafter  set forth and to assume the
following obligations:

A.  Corporate Management and Administrative Services.

(1) The Manager shall furnish to the Company adequate (a) office space, which
    may be space within the offices of the Manager or in such other place as may
    be agreed Upon from time to time, and (b) office furnishings, facilities and
    equipment as may be reasonably required for managing and administering the
    operations and conducting the business of the Company, including complying
    with the securities, tax and other reporting requirements of the United
    States and the various states in which the Company does business, conducting
    correspondence and other communications with the shareholders of the
    Company, and maintaining or supervising the maintenance of all internal
    bookkeeping, accounting and auditing services and records in connection with
    the Company's investment and business activities. The Company agrees that
    its shareholder servicing and record keeping, transfer agency and dividend
    disbursing services and certain of its fund accounting and record keeping
    services, the computing of net asset value and the preparation of certain of
    its records required by Section 31 of the Investment Company Act and the
    Rules thereunder are to be performed by Company's transfer and dividend
    disbursing agent, custodian, Portfolio Managers (as defined in paragraph
    2(B)(3)) or other service providers, and that with respect to these services
    Manager's obligations under this Section 2(A) are supervisory in nature
    only.

(2) The Manager shall employ or provide and compensate the executive,
    administrative, secretarial and clerical personnel necessary to supervise
    the provision of the services set forth in subparagraph 2(A)(1), and shall
    bear the expense of providing such services, except as may otherwise be
    provided in Section 4 of this Agreement. The Manager shall also compensate
    all officers and employees of the Company who are officers or employees of
    the Manager.

B.  Investment Management Services.

(1) The Manager shall have overall supervisory responsibility for the general
    management and investment of the Company's assets and securities portfolio
    subject to and in accordance with the investment objectives and policies of
    the Company, and any directions which the Company's Trustees may issue to
    the Manager from time to time.

(2) The Manager shall provide overall investment programs and strategies for the
    Company, shall revise such programs as necessary and shall monitor and
    report periodically to the Trustees concerning the implementation of the
    programs.

(3) The Company intends to appoint one or more persons or companies ("Portfolio
    Managers"), each such Portfolio Manager to have full investment discretion
    and to make all determinations with respect to the investment and
    reinvestment of the portion of the Company's assets assigned to that
    Portfolio Manager and the purchase and sale of portfolio securities with
    those assets, all within the Company's investment objectives, policies and
    restrictions, and the Company will take such steps as may be necessary to
    implement such appointments. The Manager shall not be responsible or liable
    for the investment merits of any decision by a Portfolio Manager to
    purchase, hold or sell a security for the portfolio of the Company. The
    Manager shall advise the Trustees of the Company which Portfolio Managers
    the Manager believes are best suited to invest the assets of the Company;
    shall monitor and evaluate the investment performance of each Portfolio
    Manager employed by the Company; shall allocate and reallocate the portion
    of the Company's assets to be managed by each Portfolio Manager; shall
    recommend changes of or additional Portfolio Managers when appropriate; and
    shall coordinate the investment activities of the Portfolio Managers to
    ensure compliance with the Company's investment policies and restrictions
    and applicable laws, including the Investment Company Act and the Internal
    Revenue Code of 1986.

(4) The Manager shall render regular reports to the Company, at regular meetings
    of the Trustees, of, among other things, the decisions which it has made
    with respect to the allocation of the Company's assets among Portfolio
    Managers.

C.  Provision of Information Necessary for Preparation of Securities
    Registration Statements. Amendments and Other Materials.

The Manager will make available and provide financial, accounting and
statistical information concerning the Manager required by the Company in the
preparation of registration statements, reports and other documents required by
federal and state securities laws, and such other information as the Company may
reasonably request for use in the preparation of such documents or of other
materials necessary or helpful for the distribution of the Company's shares.

D.  Other Obligations and Services.

(l) The Manager shall make available its officers and employees to the Trustees
    and officers of the Company for consultation and discussions regarding the
    administration and management of the Company and its investment activities.

(2) The Manager will adopt a written code of ethics complying with the
    requirements of Rule 17j-1 under the Investment Company Act and will provide
    the Company with a copy of the code of ethics and evidence of its adoption.
    Within forty-five (45) days of the end of the last calendar quarter of each
    year while this Agreement is in effect, the President or a Vice President of
    the Manager shall certify to the Company that the Manager has complied with
    the requirements of Rule 17j-1 during the previous year and that there has
    been no violation of the Manager's code of ethics or, if such a violation
    has occurred, that appropriate action was taken in response to such
    violation. Upon the written request of the Company, the Manager shall permit
    the Company, its employees or its agents to examine the reports required to
    be made by the Manager by Rule 17j-1(c)(1).

3. Execution and Allocation of Portfolio Brokerage Commissions. The Portfolio
Managers, subject to and in accordance with any directions the Company may issue
from time to time, shall place, in the name of the Company, orders for the
execution of the Company's portfolio transactions. When placing such orders, the
obligation of the Portfolio Managers shall be as provided in paragraph 5 of the
form of Portfolio Management Agreement filed as Exhibit 6(b) to the Company's
initial Registration Statement under the Investment Company Act and the
Securities Act of 1933, a copy of which paragraph 5 is attached hereto as
Exhibit A. The Manager will oversee the placement of orders by Portfolio
Managers in accordance with paragraph 5 of their respective Portfolio Management
Agreements and will render regular reports to the Company of the total brokerage
business placed on behalf of the Company by the Portfolio Managers and the
manner in which such brokerage business has been allocated.

4. Expenses of the Company. It is understood that the Company will pay all its
expenses other than those expressly assumed by the Manager herein, which
expenses payable by the Company shall include:

A.  Fees of the Manager;

B.  Expenses of all audits by independent public accountants;

C.  Expenses of transfer agent,  registrar,  dividend disbursing agent and
    shareholder record keeping services (including reasonable
    fees and expenses payable to the Manager for such services);

D.  Expenses of custodial services including fund accounting and record keeping
    services provided by the Custodian;

E.  Expenses of obtaining quotations for calculating the value of the Company's
    net assets;

F. Salaries and other compensation of any of its executive officers and
   employees who are not officers,  directors,  stockholders or
   employees of the Manager or any of its affiliates;

G.  Taxes levied against the Company and the expenses of preparing tax returns
    and reports;

H.  Brokerage fees and commissions in connection with the purchase and sale of
    portfolio securities for the Company;

I. Organizational and offering expenses;

J. Costs, including the interest expense, of borrowing money;

K.  Costs and/or fees incident to Trustee and shareholder meetings of the
    Company, the preparation and mailings of proxy material, prospectuses and
    reports of the Company to its shareholders, the filing of reports with
    regulatory bodies, the maintenance of the Company's legal existence,
    membership dues and fees of investment company industry trade associations,
    the listing (and maintenance of such listing) of the Company's shares on
    stock exchanges, and the registration of shares with federal and state
    securities authorities;

L.  Legal fees and expenses (including reasonable fees for legal services
    rendered by the Manager or its affiliates),  including the
    legal fees related to the registration and continued qualification of the
    Company's shares for sale;

M.  Costs of printing stock certificates representing shares of the Company;

N.  Trustees' fees and expenses of Trustees who are not directors,  officers,
    employees or stockholders of the Manager or any of its affiliates;

O.  Its pro rata portion of the fidelity bond required by Section 17(g) of the
    Investment Company Act, or other insurance premiums;

P. Fees payable to federal and state authorities in connection with the
   registration of the Company's shares.

5. Activities and Affiliates of the Manager.

A.  The services of the Manager to the Company hereunder are not to be deemed
    exclusive, and the Manager and any of its affiliates shall be free to render
    similar services to others. The Manager shall use the same skill and care in
    the management of the Company's assets as it uses in the administration of
    other accounts to which it provides asset management, consulting and
    portfolio manager selection services, but shall not be obligated to give the
    Company more favorable or preferential treatment vis-a-vis its other
    clients.

B.  Subject to and in accordance with the Declaration of Trust and By-Laws of
    the Company and to Section 10(a) of the Investment Company Act, it is
    understood that Trustees, officers, agents and shareholders of the Company
    are or may be interested in the Manager or its affiliates as directors,
    officers, agents or stockholders of the Manager or its affiliates; that
    directors, officers, agents and stockholders of the Manager or its
    affiliates are or may be interested in the Company as trustees, officers,
    agents, shareholders or otherwise; that the Manager or its affiliates may be
    interested in the Company as shareholders or otherwise; and that the effect
    of any such interests shall be governed by said Declaration of Trust,
    By-Laws and the Investment Company Act.

6. Fees for Services:  Compensation of Portfolio  Managers.  The compensation of
the Manager for its services under this  Agreement  shall be calculated and paid
by the Fund in  accordance  with  the  attached  Exhibit  B.  The  Manager  will
compensate the Portfolio Managers as provided in Exhibit B.

7. Liabilities of the Manager.

A.  In the absence of willful misfeasance, bad faith, gross negligence, or
    reckless disregard of obligations or duties hereunder on the part of the
    Manager, the Manager shall not be subject to liability to the Company or to
    any shareholder of the Company for any act or omission in the course of, or
    connected with, rendering services hereunder or for any losses that may be
    sustained in the purchase, holding or sale of any security.

B.  No provision of this Agreement shall be construed to protect any Trustee or
    officer of the Company, or the Manager, from liability in violation of
    Sections 17(h) and (i) of the Investment Company Act.

8. Renewal and Termination.

A.  This Agreement shall continue in effect until July 31, 2003, and shall
    continue from year to year thereafter provided such continuance is
    specifically approved at least annually by (i) the Company's Board of
    Trustees or (ii) a vote of a "majority" (as defined in the Investment
    Company Act) of the Company's outstanding voting securities, provided that
    in either event the continuance is also approved by a majority of the Board
    of Trustees who are not "interested persons" (as defined in the Investment
    Company Act) of any party to this Agreement, by vote cast in person at a
    meeting called for the purpose of voting on such approval. The aforesaid
    requirement that continuance of this Agreement be "specifically approved at
    least annually" shall be construed in a manner consistent with the
    Investment Company Act and the Rules and Regulations thereunder.

B.  This Agreement:

(a) may at any time be terminated without the payment of any penalty either by
    vote of the Trustees of the Company or by vote of a majority of the
    outstanding voting securities of the Company, on sixty (60) days' written
    notice to the Manager;

(b) shall immediately terminate in the event of its assignment (as that term is
    defined in the Investment Company Act); and

(c) may be terminated by the Manager on sixty (60) days' written notice to the
    Company.

C.  Any notice under this Agreement shall be given in writing addressed and
    delivered or mailed postpaid, to the other party to this Agreement at its
    principal place of business.

9. No Personal Liability. Reference is hereby made to the Declaration of Trust
dated August 20, 1986 establishing the Company, a copy of which has been filed
with the Secretary of the Commonwealth of Massachusetts and elsewhere as
required by law, and to any and all amendments thereto so filed or hereafter
filed. The name Liberty All-Star Equity Fund refers to the Trustees under said
Declaration of Trust, as Trustees and not personally, and no Trustee,
shareholder, officer, agent or employee of the Company shall be held to any
personal liability hereunder or in connection with the affairs of the Company,
but only the trust estate under said Declaration of Trust is liable under this
Agreement. Without limiting the generality of the foregoing, neither the Manager
nor any of its officers, directors, shareholders or employees shall, under any
circumstances, have recourse or cause or willingly permit recourse to be had
directly or indirectly to any personal, statutory, or other liability of any
shareholder, Trustee, officer, agent or employee of the Company or of any
successor of the Company, whether such liability now exists or is hereafter
incurred for claims against the trust estate, but shall look for payment solely
to said trust estate, or the assets of such successor of the Company.

10. Use of Name. The Company may use the name "Liberty All-Star" or a similar
name only for so long as this Agreement or any extension, renewal or amendment
hereof remains in effect, including any similar agreement with any organization
which shall have succeeded to the Manager's business as investment adviser. If
this Agreement is no longer in effect, the Company (to the extent it lawfully
can) will cease to use such name or any other name indicating that it is advised
by or otherwise connected with the Manager. The Trust acknowledges that the
Manager may grant the non-exclusive right to use the name "Liberty All-Star" to
any other corporation or entity, including but not limited to any investment
company of which the Manager or any subsidiary or affiliate thereof or any
successor to the business or any thereof shall be an investment advisor.

11. Termination of Fund Management Agreement dated May 15, 1987, and amended
August 1, 1997. Upon execution of this Agreement on behalf of the Company and
the Manager, the existing Fund Management Agreement dated May 15, 1987, and
amended August 1, 1997, shall terminate.

12.  Severability.  If any  provision  of this  Agreement  shall  be held or
     made  invalid  by a court  decision,  statute,  rule or
     otherwise, the remainder of this Agreement shall not be affected thereby.

13. Governing Law. To the extent that state law has not been preempted by the
provisions of any law of the United States heretofore or hereafter enacted, as
the same may be amended from time to time, this Agreement shall be administered,
construed and enforced according to the laws of the Commonwealth of
Massachusetts.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, as of the day and year first written above.

LIBERTY ALL-STAR EQUITY FUND


                                  By: _________________________________
                                  Name: William J. Ballou
                                  Title: Assistant Secretary

LIBERTY ASSET MANAGEMENT COMPANY




                                  By: __________________________________
                                  Name: William R. Parmentier
                                  Title: President, Chief Executive Officer and
                                  Chief Investment Officer



<PAGE>


                                    EXHIBIT A

5. Allocation of Brokerage. The Portfolio Manager shall have authority and
discretion to select brokers and dealers to execute portfolio transactions
initiated by the Portfolio Manager, and to select the markets on or in which the
transaction will be executed.

A. In doing so, the Portfolio Manager's primary responsibility shall be to seek
to obtain best net price and execution for the Fund. However, this
responsibility shall not obligate the Portfolio Manager to solicit competitive
bids for each transaction or to seek the lowest available commission cost to the
Fund, so long as the Portfolio Manager reasonably believes that the broker or
dealer selected by it can be expected to obtain a "best execution" market price
on the particular transaction and determines in good faith that the commission
cost is reasonable in relation to the value of the brokerage and research
services (as defined in Section 28(e)(3) of the Securities Exchange Act of 1934)
provided by such broker or dealer to the Portfolio Manager viewed in terms of
either that particular transaction or of the Portfolio Manager's overall
responsibilities with respect to its clients, including the Fund, as to which
the Portfolio Manager exercises investment discretion, notwithstanding that the
Fund may not be the direct or exclusive beneficiary of any such services or that
another broker may be willing to charge the Fund a lower commission on the
particular transaction.

B. Subject to the requirements of paragraph A above, the Fund Manager shall have
the right to request that transactions giving rise to brokerage commissions, in
an amount to be agreed upon by the Fund Manager and the Portfolio Manager, shall
be executed by brokers and dealers that provide brokerage or research services
to the Fund or the Fund Manager, or as to which an on-going relationship will be
of value to the Fund in the management of its assets, which services and
relationship may, but need not, be of direct benefit to the Fund Account. The
Portfolio Manager shall not be responsible under paragraph A above with respect
to transactions executed through any such broker or dealer.

C. The Portfolio Manager shall not execute any portfolio transactions for the
Fund Account with a broker or dealer which is an "affiliated person" (as defined
in the Act) of the Fund, the Portfolio Manager or any other Portfolio Manager of
the Fund without the prior written approval of the Fund. The Fund will provide
the Portfolio Manager with a list of brokers and dealers which are "affiliated
persons" of the Fund or its Portfolio Managers.


<PAGE>



                                    EXHIBIT B
                                   MANAGER FEE

For the corporate management and administrative services provided to the Company
pursuant to Section 2(A) of this Agreement, the Company will pay to the Manager,
on or before the 10th day of each calendar month, a monthly fee for the previous
calendar month in the amount of l/12th of the following percentages of the
average of the net asset values of the Company as of the close of the last
business day of the New York Stock Exchange in each calendar week during the
preceding calendar month: 0.20% of the first $400 million of such average net
asset value; 0.18% of such average net asset value exceeding $400 million up to
and including $800 million; 0.162% of such average net asset value exceeding
$800 million up to and including $1.2 billion; and 0.146% of such average net
asset value exceeding $1.2 billion.

For the investment management services provided to the Company pursuant to
Section 2(B) of this Agreement, the Company will pay to the Manager, on or
before the 10th day of each calendar month, a monthly fee for the previous
calendar month in the amount of l/12th of the following percentages of the
average of the net asset values of the Company as of the close of the last
business day of the New York Stock Exchange in each calendar week during the
preceding calendar month: 0.80% of the first $400 million of such average net
asset value; 0.72% of such average net asset value exceeding $400 million up to
and including $800 million; 0.648% of such average net asset value exceeding
$800 million up to and including $1.2 billion; and 0.584% of such average net
asset value exceeding $1.2 billion.

Pursuant to Section 6 of this Agreement, the Manager will pay each Portfolio
Manager a monthly fee in the amount of l/12th of 0.40% of the amount obtained by
multiplying the Portfolio Manager's Percentage times such average net asset
values of the Company on the foregoing dates up to $400 million; 0.36% of the
amount obtained by multiplying the Portfolio Manager's Percentage times such
average net asset value exceeding $400 million up to and including $800 million;
0.324% of the amount obtained by multiplying the Portfolio Manager's Percentage
times such average net asset value exceeding $800 million up to and including
$1.2 billion; and 0.292% of the amount obtained by multiplying the Portfolio
Manager's Percentage times such average net asset value exceeding $1.2 billion.

"Portfolio Manager's Percentage" means the percentage obtained by dividing the
average of the net asset values on the foregoing dates of the portion of the
portfolio assets of the Company assigned to that Portfolio Manager by the
average of the net asset values on such dates of the Company as a whole.

The foregoing fees shall be pro-rated for any month during which this Agreement
is in effect for only a portion of the month.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2G
<SEQUENCE>5
<FILENAME>mastra.txt
<DESCRIPTION>PORTFOLIO MANAGEMENT AGREEMENT W/MASTRAPASQUA
<TEXT>


                         PORTFOLIO MANAGEMENT AGREEMENT

                                November 1, 2001

Mastrapasqua & Associates, Inc.
814 Church Street - Suite 600
Nashville, TN  37203

Re: Portfolio Management Agreement

Ladies and Gentlemen:

    Liberty All-Star Equity Fund (the "Fund") is a diversified closed-end
investment company registered under the Investment Company Act of 1940 (the
"Act"), and is subject to the rules and regulations promulgated thereunder.

    Liberty Asset Management Company (the "Fund Manager") evaluates and
recommends portfolio managers for the assets of the Fund, and is responsible for
the day-to-day administration of the Fund.

    1. Employment as a Portfolio Manager. The Fund being duly authorized hereby
employs Mastrapasqua & Associates, Inc. (the "Portfolio Manager") as a
discretionary portfolio manager, on the terms and conditions set forth herein,
of that portion of the Fund's assets which the Fund Manager determines to assign
to the Portfolio Manager (those assets being referred to as the "Portfolio
Manager Account"). The Fund Manager may, from time to time, allocate and
reallocate the Fund's assets among the Portfolio Manager and the other portfolio
managers of the Fund's assets.

    2. Acceptance of Employment; Standard of Performance. The Portfolio Manager
accepts its employment as a discretionary portfolio manager and agrees to use
its best professional judgment to make timely investment decisions for the
Portfolio Manager Account in accordance with the provisions of this Agreement.

    3. Portfolio Management Services of Portfolio Manager. In providing
portfolio management services to the Portfolio Manager Account, the Portfolio
Manager shall be subject to the investment objectives, policies and restrictions
of the Fund as set forth in its current Registration Statement under the Act, as
the same may be modified from time to time (the "Registration Statement"), and
the investment restrictions set forth in the Act and the Rules thereunder (as
and to the extent set forth in the Registration Statement or in other
documentation furnished to the Portfolio Manager by the Fund or the Fund
Manager), to the supervision and control of the Board of Trustees of the Fund,
and to instructions from the Fund Manager. The Portfolio Manager shall not,
without the prior approval of the Fund or the Fund Manager, effect any
transactions which would cause the Portfolio Manager Account, treated as a
separate fund, to be out of compliance with any of such restrictions or
policies.

    4. Transaction Procedures. All portfolio transactions for the Portfolio
Manager Account will be consummated by payment to or delivery by the custodian
of the Fund (the "Custodian"), or such depositories or agents as may be
designated by the Custodian in writing, as custodian for the Fund, of all cash
and/or securities due to or from the Portfolio Manager Account, and the
Portfolio Manager shall not have possession or custody thereof or any
responsibility or liability with respect to such custody. The Portfolio Manager
shall advise and confirm in writing to the Custodian all investment orders for
the Portfolio Manager Account placed by it with brokers and dealers at the time
and in the manner set forth in Schedule A hereto (as amended from time to time
by the Fund Manager). The Fund shall issue to the Custodian such instructions as
may be appropriate in connection with the settlement of any transaction
initiated by the Portfolio Manager. The Fund shall be responsible for all
custodial arrangements and the payment of all custodial charges and fees, and,
upon giving proper instructions to the Custodian, the Portfolio Manager shall
have no responsibility or liability with respect to custodial arrangements or
the acts, omissions or other conduct of the Custodian.

    5. Allocation of Brokerage. The Portfolio Manager shall have authority and
discretion to select brokers and dealers to execute portfolio transactions
initiated by the Portfolio Manager for the Portfolio Manager Account, and to
select the markets on or in which the transaction will be executed.

        A. In doing so, the Portfolio Manager's primary responsibility shall be
    to seek to obtain best net price and execution for the Fund. However, this
    responsibility shall not obligate the Portfolio Manager to solicit
    competitive bids for each transaction or to seek the lowest available
    commission cost to the Fund, so long as the Portfolio Manager reasonably
    believes that the broker or dealer selected by it can be expected to obtain
    a "best execution" market price on the particular transaction and determines
    in good faith that the commission cost is reasonable in relation to the
    value of the brokerage and research services (as defined in Section 28(e)(3)
    of the Securities Exchange Act of 1934) provided by such broker or dealer to
    the Portfolio Manager viewed in terms of either that particular transaction
    or of the Portfolio Manager's overall responsibilities with respect to its
    clients, including the Fund, as to which the Portfolio Manager exercises
    investment discretion, notwithstanding that the Fund may not be the direct
    or exclusive beneficiary of any such services or that another broker may be
    willing to charge the Fund a lower commission on the particular transaction.

        B. Subject to the requirements of paragraph A above, the Fund Manager
    shall have the right to request that transactions giving rise to brokerage
    commissions, in an amount to be agreed upon by the Fund Manager and the
    Portfolio Manager, shall be executed by brokers and dealers that provide
    brokerage or research services to the Fund Manager, or as to which an
    on-going relationship will be of value to the Fund in the management of its
    assets, which services and relationship may, but need not, be of direct
    benefit to the Portfolio Manager Account.

        C. The Portfolio Manager shall not execute any portfolio transactions
    for the Portfolio Manager Account with itself or any broker or dealer which
    is an "affiliated person" (as defined in the Act) of the Fund, the Portfolio
    Manager or any other Portfolio Manager of the Fund without the prior written
    approval of the Fund except in accordance with SEC Exemptive Order No. 24288
    dated February 15, 2000, a copy of which has been furnished to the Portfolio
    Manager, and Rule 17e-1 procedures as approved by the Fund's Trustees from
    time to time. The Fund Manager will provide the Portfolio Manager with a
    list of brokers and dealers which are "affiliated persons" of the Fund or
    its Portfolio Managers.

    6. Proxies. The Fund will vote or direct the voting of all proxies solicited
by or with respect to the issuers of securities in which assets of the Fund
Account may be invested in accordance with authorization provided by the Fund
Manager from time to time.

    7. Fees for Services. The compensation of the Portfolio Manager for its
services under this Agreement shall be calculated and paid by the Fund Manager
in accordance with the attached Schedule C. Pursuant to the Fund Management
Agreement between the Fund and the Fund Manager, the Fund Manager is solely
responsible for the payment of fees to the Portfolio Manager, and the Portfolio
Manager agrees to seek payment of its fees solely from the Fund Manager.

    8. Other Investment Activities of Portfolio Manager. The Fund acknowledges
that the Portfolio Manager or one or more of its affiliates has investment
responsibilities, renders investment advice to and performs other investment
advisory services for other individuals or entities ("Client Accounts"), and
that the Portfolio Manager, its affiliates or any of its or their directors,
members, officers, agents or employees may buy, sell or trade in any securities
for its or their respective accounts ("Affiliated Accounts"). Subject to the
provisions of paragraph 2 hereof, the Fund agrees that the Portfolio Manager or
its affiliates may give advice or exercise investment responsibility and take
such other action with respect to other Client Accounts and Affiliated Accounts
which may differ from the advice given or the timing or nature of action taken
with respect to the Portfolio Manager Account, provided that the Portfolio
Manager acts in good faith, and provided further, that it is the Portfolio
Manager's policy to allocate, within its reasonable discretion, investment
opportunities to the Portfolio Manager Account over a period of time on a fair
and equitable basis relative to the Client Accounts and the Affiliated Accounts,
taking into account the cash position and the investment objectives and policies
of the Fund and any specific investment restrictions applicable thereto. The
Fund acknowledges that one or more Client Accounts and Affiliated Accounts may
at any time hold, acquire, increase, decrease, dispose of or otherwise deal with
positions in investments in which the Portfolio Manager Account may have an
interest from time to time, whether in transactions which involve the Portfolio
Manager Account or otherwise. The Portfolio Manager shall have no obligation to
acquire for the Portfolio Manager Account a position in any investment which any
Client Account or Affiliated Account may acquire, and the Fund shall have no
first refusal, co-investment or other rights in respect of any such investment,
either for the Portfolio Manager Account or otherwise.

    9. Limitation of Liability. The Portfolio Manager shall not be liable for
any action taken, omitted or suffered to be taken by it in its reasonable
judgment, in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement, or in
accordance with (or in the absence of) specific directions or instructions from
the Fund, provided, however, that such acts or omissions shall not have resulted
from the Portfolio Manager's willful misfeasance, bad faith or gross negligence,
a violation of the standard of care established by and applicable to the
Portfolio Manager in its actions under this Agreement or breach of its duty or
of its obligations hereunder (provided, however, that the foregoing shall not be
construed to protect the Portfolio Manager from liability in violation of
Section 17 of the Act).

    10. Confidentiality. Subject to the duty of the Portfolio Manager and the
Fund to comply with applicable law, including any demand of any regulatory or
taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Portfolio Manager Account and the
actions of the Portfolio Manager and the Fund in respect thereof.

    11. Assignment. This Agreement shall terminate automatically in the event of
its assignment, as that term is defined in Section 2(a)(4) of the Act. The
Portfolio Manager shall notify the Fund in writing sufficiently in advance of
any proposed change of control, as defined in Section 2(a)(9) of the Act, as
will enable the Fund to consider whether an assignment as defined in Section
2(a)(4) of the Act will occur, and whether to take the steps necessary to enter
into a new contract with the Portfolio Manager.

12. Representations, Warranties and Agreements of the Fund. The Fund represents,
warrants and agrees that:

        A. The  Portfolio Manager has been duly appointed to provide investment
    services to the  Portfolio  Manager  Account as contemplated hereby.

        B. The Fund has delivered to the Portfolio Manager such instructions
    governing the investment of the Portfolio Manager Account as is necessary
    for the Portfolio Manager to carry out its obligations under this Agreement.

        C. Upon certification by the Portfolio Manager that it has adopted a
    written code of ethics and procedures reasonably necessary to prevent access
    persons, as defined by said code of ethics, from violating the anti-fraud
    provisions of Rule 17j-1 under the Act, the Fund will not unreasonably
    withhold its approval of the code of ethics adopted by the Portfolio Manager
    provided that the Portfolio Manager certifies to the Fund that in all other
    material respects the Portfolio Manager's code of ethics complies with Rule
    17j-1.

13.  Representations,  Warranties and Agreements of the Portfolio  Manager.  The
Portfolio Manager represents, warrants and agrees that:

        A. It is registered as an "Investment Adviser" under the Investment
    Advisers Act of 1940 ("Advisers Act").

        B. It will maintain, keep current and preserve on behalf of the Fund, in
    the manner required or permitted by the Act and the Rules thereunder, the
    records identified in Schedule B (as Schedule B may be amended from time to
    time by the Fund Manager). The Portfolio Manager agrees that such records
    are the property of the Fund, and will be surrendered to the Fund promptly
    upon request.

        C. It will adopt and maintain a written code of ethics complying with
    the requirements of Rule 17j-1 and submit same and any amendments thereto
    promptly to the Fund, but not less often than annually. The Portfolio
    Manager agrees that it will notify the Fund within 15 days of adopting
    material changes to its code of ethics. While this Agreement is in effect,
    an officer or general partner of the Portfolio Manager shall certify
    annually to the Fund that the Portfolio Manager has complied with the
    requirements of Rule 17j-1 during the previous year and has procedures
    reasonably necessary to prevent access persons from violating the Portfolio
    Manager's code of ethics. On an annual basis, the Portfolio Manager shall
    provide a written report to the Fund describing any issues arising under its
    code of ethics or procedures since the last report was so submitted,
    including information about material violations of the code or procedures
    and any action taken in response to such violations. Upon the written
    request of the Fund, the Portfolio Manager shall permit the Fund to examine
    the reports required to be maintained by the Portfolio Manager under Rule
    17j-1(c)(l).

        D. Upon request, the Portfolio Manager will promptly supply the Fund
    with any information concerning the Portfolio Manager and its stockholders,
    employees and affiliates which the Fund may reasonably require in connection
    with the preparation of its Registration Statement or amendments thereto,
    proxy material, reports and other documents required to be filed under the
    Act, the Securities Act of 1933, or other applicable securities laws.

    14. Amendment. This Agreement may be amended at any time, but (except for
Schedules A and B which may be amended by the Fund Manager acting alone) only by
written agreement among the Portfolio Manager, the Fund Manager and the Fund,
which amendment, other than amendments to Schedules A and B, is subject to the
approval of the Board of Trustees and the Shareholders of the Fund as and to the
extent required by the Act.

    15. Effective Date; Term. This Agreement shall continue until July 31, 2003
and from year to year thereafter provided such continuance is specifically
approved at least annually by (i) the Fund's Board of Trustees or (ii) a vote of
a "majority" (as defined in the Act) of the Fund's outstanding voting
securities, provided that in either event such continuance is also approved by a
majority of the Board of Trustees who are not "interested persons" (as defined
in the Act) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval. The aforesaid requirement
that continuance of this Agreement be "specifically approved at least annually"
shall be construed in a manner consistent with the Act and the Rules and
Regulations thereunder.

    16. Termination. This Agreement may be terminated by any party, without
penalty, immediately upon written notice to the other parties in the event of a
breach of any provision thereof by a party so notified, or otherwise upon not
less than thirty (30) days' written notice to the Portfolio Manager in the case
of termination by the Fund or the Fund Manager, or ninety (90) days' written
notice to the Fund and the Fund Manager in the case of termination by the
Portfolio Manager, but any such termination shall not affect the status,
obligations or liabilities of any party hereto to the other parties.

    17. Applicable Law. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter enacted, as
the same may be amended from time to time, this Agreement shall be administered,
construed and enforced according to the laws of the Commonwealth of
Massachusetts.

    18. Severability. If any term or condition of this Agreement shall be
invalid or unenforceable to any extent or in any application, then the remainder
of this Agreement, and such term or condition except to such extent or in such
application, shall not be affected thereby, and each and every term and
condition of this Agreement shall be valid and enforced to the fullest extent
and in the broadest application permitted by law.

IN WITNESS WHEREOF, the parties have hereunto set their hands as of the date
first written above.

                                 LIBERTY ALL-STAR EQUITY FUND

                                 By: ________________________________________
                                 Title:

                                 LIBERTY ASSET MANAGEMENT COMPANY

                                 By: ________________________________________
                                 Title:

ACCEPTED:

MASTRAPASQUA & ASSOCIATES, INC.

By: ________________________________________
Title:

MASTRAPASQUA & ASSOCIATES, INC.

By: ________________________________________
Title:



SCHEDULES:     A.   Operational Procedures For Portfolio Transactions [omitted]
               B.   Record Keeping Requirements
               C.   Fee Schedule




<PAGE>




                          LIBERTY ALL-STAR EQUITY FUND

                         Portfolio Management Agreement
                                   SCHEDULE B

RECORDS TO BE MAINTAINED BY THE PORTFOLIO MANAGER

1. (Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all other
   portfolio purchases and sales, given by the Portfolio Manager on behalf of
   the Fund for, or in connection with, the purchase or sale of securities,
   whether executed or unexecuted. Such records shall include:

    A. The name of the broker;

    B. The terms and conditions of the order and of any modifications or
       cancellation thereof;

    C. The time of entry or cancellation;

    D. The price at which executed;

    E. The time of receipt of a report of execution; and

    F. The name of the person who placed the order on behalf of the Fund.

2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within ten
   (10) days after the end of the quarter, showing specifically the basis or
   bases upon which the allocation of orders for the purchase and sale of
   portfolio securities to named brokers or dealers was effected, and the
   division of brokerage commissions or other compensation on such purchase and
   sale orders. Such record:

    A. Shall include the consideration given to:

        (i)The sale of shares of the Fund by brokers or dealers.

       (ii)The supplying of services or benefits by brokers or dealers to:

            (a) The Fund;

            (b) The Manager (Liberty Asset Management Company);

            (c) The Portfolio Manager; and

            (d) Any person other than the foregoing.

       (iii)Any other consideration other than the technical qualifications of
            the brokers and dealers as such.

    B. Shall show the nature of the services or benefits made available.

    C. Shall describe in detail the application of any general or specific
       formula or other determinant used in arriving at such allocation of
       purchase and sale orders and such division of brokerage commissions or
       other compensation.

    D. The name of the  person  responsible  for  making  the  determination  of
       such  allocation  and such  division  of  brokerage
       commissions or other compensation.

3. (Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum
   identifying the person or persons, committees or groups authorizing the
   purchase or sale of portfolio securities. Where an authorization is made by a
   committee or group, a record shall be kept of the names of its members who
   participate in the authorization. There shall be retained as part of this
   record: any memorandum, recommendation or instruction supporting or
   authorizing the purchase or sale of portfolio securities and such other
   information as is appropriate to support the authorization.1

4. (Rule 31a-1(f)) Such accounts, books and other documents as are required to
   be maintained by registered investment advisers by rule adopted under Section
   204 of the Investment Advisers Act of 1940, to the extent such records are
   necessary or appropriate to record the Portfolio Manager's transactions with
   the Fund.

- ----------
1    Such information might include: the current Form 10-K, annual and quarterly
     reports,  press  releases,  reports by analysts  and from  brokerage  firms
     (including  their  recommendation:  i.e., buy, sell,  hold) or any internal
     reports or portfolio manager reviews.


<PAGE>



                                   SCHEDULE C

                              PORTFOLIO MANAGER FEE

    For services provided to the Fund Account, the Fund Manager will pay to the
Portfolio Manager, on or before the 10th day of each calendar month, a monthly
fee for the previous calendar month in the amount of 1/12(th) of: 0.40% of the
amount obtained by multiplying the Portfolio Manager's Percentage (as
hereinafter defined) times the Average Total Fund Net Assets (as hereinafter
defined) up to $400 million; 0.36% of the amount obtained by multiplying the
Portfolio Manager's Percentage times the Average Total Fund Net Assets exceeding
$400 million up to and including $800 million; 0.324% of the amount obtained by
multiplying the Portfolio Manager's Percentage times the Average Total Fund Net
Assets exceeding $800 million up to and including $1.2 billion; 0.292% of the
amount obtained by multiplying the Portfolio Manager's Percentage times the
Average Total Fund Net Assets exceeding $1.2 billion.

    "Portfolio Manager's Percentage" means the percentage obtained by dividing
(i) the average of the net asset values of the Fund Account as of the close of
the last business day of the New York Stock Exchange in each calendar week
during the preceding calendar month, by (ii) the Average Total Fund Net Assets.

    "Average Total Fund Net Assets" means the average of the net asset values of
the Fund as a whole as of the close of the last business day of the New York
Stock Exchange in each calendar week during the preceding calendar month.

    The fee shall be pro-rated for any month during which this Agreement is in
effect for only a portion of the month.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2G
<SEQUENCE>6
<FILENAME>tcw.txt
<DESCRIPTION>PORTFOLIO MANAGEMENT AGREEMENT W/TCW
<TEXT>
                         PORTFOLIO MANAGEMENT AGREEMENT

                                November 1, 2001

TCW Investment Management Company
865 South Figueroa Street
Los Angeles, CA  90017

Re: Portfolio Management Agreement

Ladies and Gentlemen:

    Liberty All-Star Equity Fund (the "Fund") is a diversified closed-end
investment company registered under the Investment Company Act of 1940 (the
"Act"), and is subject to the rules and regulations promulgated thereunder.

    Liberty Asset Management Company (the "Fund Manager") evaluates and
recommends portfolio managers for the assets of the Fund, and is responsible for
the day-to-day corporate management and Fund administration of the Fund.

    1. Employment as a Portfolio Manager. The Fund being duly authorized hereby
employs TCW Investment Management Company (the "Portfolio Manager") as a
discretionary portfolio manager, on the terms and conditions set forth herein,
of that portion of the Fund's assets which the Fund Manager determines to assign
to the Portfolio Manager (those assets being referred to as the "Portfolio
Manager Account"). The Fund Manager may, from time to time, allocate and
reallocate the Fund's assets among the Portfolio Manager and the other portfolio
managers of the Fund's assets.

    2. Acceptance of Employment; Standard of Performance. The Portfolio Manager
accepts its employment as a discretionary portfolio manager and agrees to use
its best professional judgment to make timely investment decisions for the
Portfolio Manager Account in accordance with the provisions of this Agreement.

    3. Portfolio Management Services of Portfolio Manager. In providing
portfolio management services to the Portfolio Manager Account, the Portfolio
Manager shall be subject to the investment objectives, policies and restrictions
of the Fund as set forth in its current Registration Statement under the Act, as
the same may be modified from time to time (the "Registration Statement"), and
the investment restrictions set forth in the Act and the Rules thereunder (as
and to the extent set forth in the Registration Statement or in other
documentation furnished to the Portfolio Manager by the Fund or the Fund
Manager), to the supervision and control of the Board of Trustees of the Fund,
and to instructions from the Fund Manager. The Portfolio Manager shall not,
without the prior approval of the Fund or the Fund Manager, effect any
transactions which would cause the Portfolio Manager Account, treated as a
separate fund, to be out of compliance with any of such restrictions or
policies.

    4. Transaction Procedures. All portfolio transactions for the Portfolio
Manager Account will be consummated by payment to or delivery by the custodian
of the Fund (the "Custodian"), or such depositories or agents as may be
designated by the Custodian in writing, as custodian for the Fund, of all cash
and/or securities due to or from the Portfolio Manager Account, and the
Portfolio Manager shall not have possession or custody thereof or any
responsibility or liability with respect to such custody. The Portfolio Manager
shall advise and confirm in writing to the Custodian all investment orders for
the Portfolio Manager Account placed by it with brokers and dealers at the time
and in the manner set forth in Schedule A hereto (as amended from time to time
by the Fund Manager). The Fund shall issue to the Custodian such instructions as
may be appropriate in connection with the settlement of any transaction
initiated by the Portfolio Manager. The Fund shall be responsible for all
custodial arrangements and the payment of all custodial charges and fees, and,
upon giving proper instructions to the Custodian, the Portfolio Manager shall
have no responsibility or liability with respect to custodial arrangements or
the acts, omissions or other conduct of the Custodian.

    5. Allocation of Brokerage. The Portfolio Manager shall have authority and
discretion to select brokers and dealers to execute portfolio transactions
initiated by the Portfolio Manager for the Portfolio Manager Account, and to
select the markets on or in which the transaction will be executed.

        A. In doing so, the Portfolio Manager's primary responsibility shall be
    to seek to obtain best net price and execution for the Fund. However, this
    responsibility shall not obligate the Portfolio Manager to solicit
    competitive bids for each transaction or to seek the lowest available
    commission cost to the Fund, so long as the Portfolio Manager reasonably
    believes that the broker or dealer selected by it can be expected to obtain
    a "best execution" market price on the particular transaction and determines
    in good faith that the commission cost is reasonable in relation to the
    value of the brokerage and research services (as defined in Section 28(e)(3)
    of the Securities Exchange Act of 1934) provided by such broker or dealer to
    the Portfolio Manager viewed in terms of either that particular transaction
    or of the Portfolio Manager's overall responsibilities with respect to its
    clients, including the Fund, as to which the Portfolio Manager exercises
    investment discretion, notwithstanding that the Fund may not be the direct
    or exclusive beneficiary of any such services or that another broker may be
    willing to charge the Fund a lower commission on the particular transaction.

        B. Subject to the requirements of paragraph A above, the Fund Manager
    shall have the right to request that transactions giving rise to brokerage
    commissions, in an amount to be agreed upon by the Fund Manager and the
    Portfolio Manager, shall be executed by brokers and dealers that provide
    brokerage or research services to the Fund Manager, or as to which an
    on-going relationship will be of value to the Fund in the management of its
    assets, which services and relationship may, but need not, be of direct
    benefit to the Portfolio Manager Account. Notwithstanding any other
    provision of this Agreement, the Portfolio Manager shall not be responsible
    under paragraph A above with respect to transactions executed through any
    such broker or dealer.

        C. The Portfolio Manager shall not execute any portfolio transactions
    for the Portfolio Manager Account with a broker or dealer which is an
    "affiliated person" (as defined in the Act) of the Fund, the Portfolio
    Manager or any other Portfolio Manager of the Fund without the prior written
    approval of the Fund. The Fund Manager will provide the Portfolio Manager
    with a list of brokers and dealers which are "affiliated persons" of the
    Fund or its Portfolio Managers.

    6. Proxies. The Portfolio Manager will vote all proxies solicited by or with
respect to the issuers of securities in which assets of the Portfolio Manager
Account may be invested from time to time in accordance with such policies as
shall be determined by the Fund Manager.

    7. Fees for Services. The compensation of the Portfolio Manager for its
services under this Agreement shall be calculated and paid by the Fund Manager
in accordance with the attached Schedule C. Pursuant to the Fund Management
Agreement between the Fund and the Fund Manager, the Fund Manager is solely
responsible for the payment of fees to the Portfolio Manager, and the Portfolio
Manager agrees to seek payment of its fees solely from the Fund Manager.

    8. Other Investment Activities of Portfolio Manager. The Fund acknowledges
that the Portfolio Manager or one or more of its affiliates has investment
responsibilities, renders investment advice to and performs other investment
advisory services for other individuals or entities ("Client Accounts"), and
that the Portfolio Manager, its affiliates or any of its or their directors,
officers, agents or employees may buy, sell or trade in any securities for its
or their respective accounts ("Affiliated Accounts"). Subject to the provisions
of paragraph 2 hereof, the Fund agrees that the Portfolio Manager or its
affiliates may give advice or exercise investment responsibility and take such
other action with respect to other Client Accounts and Affiliated Accounts which
may differ from the advice given or the timing or nature of action taken with
respect to the Portfolio Manager Account, provided that the Portfolio Manager
acts in good faith, and provided further, that it is the Portfolio Manager's
policy to allocate, within its reasonable discretion, investment opportunities
to the Portfolio Manager Account over a period of time on a fair and equitable
basis relative to the Client Accounts and the Affiliated Accounts, taking into
account the cash position and the investment objectives and policies of the Fund
and any specific investment restrictions applicable thereto. The Fund
acknowledges that one or more Client Accounts and Affiliated Accounts may at any
time hold, acquire, increase, decrease, dispose of or otherwise deal with
positions in investments in which the Portfolio Manager Account may have an
interest from time to time, whether in transactions which involve the Portfolio
Manager Account or otherwise. The Portfolio Manager shall have no obligation to
acquire for the Portfolio Manager Account a position in any investment which any
Client Account or Affiliated Account may acquire, and the Fund shall have no
first refusal, co-investment or other rights in respect of any such investment,
either for the Portfolio Manager Account or otherwise.

    9. Limitation of Liability. The Portfolio Manager shall not be liable for
any action taken, omitted or suffered to be taken by it in its reasonable
judgment, in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement, or in
accordance with (or in the absence of) specific directions or instructions from
the Fund, provided, however, that such acts or omissions shall not have resulted
from the Portfolio Manager's willful misfeasance, bad faith or gross negligence,
a violation of the standard of care established by and applicable to the
Portfolio Manager in its actions under this Agreement or breach of its duty or
of its obligations hereunder (provided, however, that the foregoing shall not be
construed to protect the Portfolio Manager from liability in violation of
Section 17(i) of the Act).

    10. Confidentiality. Subject to the duty of the Portfolio Manager and the
Fund to comply with applicable law, including any demand of any regulatory or
taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Portfolio Manager Account and the
actions of the Portfolio Manager and the Fund in respect thereof.

    11. Assignment. This Agreement shall terminate automatically in the event of
its assignment, as that term is defined in Section 2(a)(4) of the Act. The
Portfolio Manager shall notify the Fund in writing sufficiently in advance of
any proposed change of control, as defined in Section 2(a)(9) of the Act, as
will enable the Fund to consider whether an assignment as defined in Section
2(a)(4) of the Act will occur, and whether to take the steps necessary to enter
into a new contract with the Portfolio Manager.

     12.  Representations,  Warranties  and  Agreements  of the  Fund.  The Fund
represents, warrants and agrees that:

        A. The  Portfolio  Manager has been duly appointed to provide investment
    services to the  Portfolio  Manager  Account as
    contemplated hereby.

        B. The Fund will deliver to the Portfolio Manager a true and complete
    copy of its then current registration statement as effective from time to
    time and such other documents governing the investment of the Fund Account
    and such other information as is necessary for the Portfolio Manager to
    carry out its obligations under this Agreement.

     13.  Representations,  Warranties and Agreements of the Portfolio  Manager.
The Portfolio Manager represents, warrants and agrees that:

        A. It is registered as an "Investment Adviser" under the Investment
    Advisers Act of 1940 ("Advisers Act").

        B. It will maintain, keep current and preserve on behalf of the Fund, in
    the manner required or permitted by the Act and the Rules thereunder, the
    records identified in Schedule B (as Schedule B may be amended from time to
    time by the Fund Manager). The Portfolio Manager agrees that such records
    are the property of the Fund, and will be surrendered to the Fund promptly
    upon request.

        C. It will adopt a written code of ethics complying with the
    requirements of Rule 17j-1 under the 1940 Act. Within 45 days of the end of
    each year while this Agreement is in effect, an officer or general partner
    of the Portfolio Manager shall certify to the Fund that the Portfolio
    Manager has complied with the requirements of Rule 17j-1 during the previous
    year and that there has been no violation of its code of ethics or, if such
    a violation has occurred, that appropriate action was taken in response to
    such violation.

        D. Upon request, the Portfolio Manager will promptly supply the Fund
    with any information concerning the Portfolio Manager and its stockholders,
    employees and affiliates which the Fund may reasonably require in connection
    with the preparation of its Registration Statement or amendments thereto,
    proxy material, reports and other documents required to be filed under the
    Act, the Securities Act of 1933, or other applicable securities laws.

        E. Reference is hereby made to the Declaration of Trust dated August 20,
    1986 establishing the Fund, a copy of which has been filed with the
    Secretary of the Commonwealth of Massachusetts and elsewhere as required by
    law, and to any and all amendments thereto so filed or hereafter filed. The
    name Liberty All-Star Equity Fund refers to the Trustees under said
    Declaration of Trust, as Trustees and not personally, and no Trustee,
    shareholder, officer, agent or employee of the Fund shall be held to any
    personal liability hereunder or in connection with the affairs of the Fund,
    but only the trust estate under said Declaration of Trust is liable under
    this Agreement. Without limiting the generality of the foregoing, neither
    the Portfolio Manager nor any of its officers, directors, partners,
    shareholders or employees shall, under any circumstances, have recourse or
    cause or willingly permit recourse to be had directly or indirectly to any
    personal, statutory, or other liability of any shareholder, Trustee,
    officer, agent or employee of the Fund or of any successor of the Fund,
    whether such liability now exists or is hereafter incurred for claims
    against the trust estate, but shall look for payment solely to said trust
    estate, or the assets of such successor of the Fund.

    14. Amendment. This Agreement may be amended at any time, but only by
written agreement among the Portfolio Manager, the Fund Manager and the Fund,
which amendment, other than amendments to Schedules A and B, is subject to the
approval of the Board of Trustees and the Shareholders of the Fund as and to the
extent required by the Act.

    15. Effective Date; Term. This Agreement shall continue until July 31, 2003
and from year to year thereafter provided such continuance is specifically
approved at least annually by (i) the Fund's Board of Trustees or (ii) a vote of
a "majority" (as defined in the Act) of the Fund's outstanding voting
securities, provided that in either event such continuance is also approved by a
majority of the Board of Trustees who are not "interested persons" (as defined
in the Act) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval and provided further that, in
accordance with the conditions of the application of the Fund and Fund Manager
for an exemption from 15(a) of the Act (Rel. Nos. IC 19436 and 19491), the
continuance of this Agreement shall be subject to approval by such "majority" of
the Fund's outstanding voting securities at the regularly scheduled annual
meeting of shareholders of the Fund next following the date of this Agreement.
The aforesaid requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner consistent with the
Act and the Rules and Regulations thereunder.

    16. Termination. This Agreement may be terminated by any party, without
penalty, immediately upon written notice to the other parties in the event of a
breach of any provision thereof by a party so notified, or otherwise upon not
less than thirty (30) days' written notice to the Portfolio Manager in the case
of termination by the Fund or the Fund Manager, or ninety (90) days' written
notice to the Fund and the Fund Manager in the case of termination by the
Portfolio Manager, but any such termination shall not affect the status,
obligations or liabilities of any party hereto to the other parties.

    17. Applicable Law. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter enacted, as
the same may be amended from time to time, this Agreement shall be administered,
construed and enforced according to the laws of the Commonwealth of
Massachusetts.

    18. Severability. If any term or condition of this Agreement shall be
invalid or unenforceable to any extent or in any application, then the remainder
of this Agreement, and such term or condition except to such extent or in such
application, shall not be affected thereby, and each and every term and
condition of this Agreement shall be valid and enforced to the fullest extent
and in the broadest application permitted by law.


                                 LIBERTY ALL-STAR EQUITY FUND

                                 By: ________________________________________
                                 Title:

                                 LIBERTY ASSET MANAGEMENT COMPANY

                                 By: ________________________________________
                                 Title:

ACCEPTED:

TCW INVESTMENT MANAGEMENT COMPANY

By: ________________________________________
Title:

TCW INVESTMENT MANAGEMENT COMPANY

By: ________________________________________
Title:



SCHEDULES:    A.   Operational Procedures For Portfolio Transactions [omitted]
              B.   Record Keeping Requirements
              C.   Fee Schedule





<PAGE>



                          LIBERTY ALL-STAR EQUITY FUND

                         Portfolio Management Agreement
                                   SCHEDULE B

RECORDS TO BE MAINTAINED BY THE PORTFOLIO MANAGER

1. (Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all other
   portfolio purchases and sales, given by the Portfolio Manager on behalf of
   the Fund for, or in connection with, the purchase or sale of securities,
   whether executed or unexecuted. Such records shall include:

    A. The name of the broker;

    B. The terms and conditions of the order and of any modifications or
       cancellation thereof;

    C. The time of entry or cancellation;

    D. The price at which executed;

    E. The time of receipt of a report of execution; and

    F. The name of the person who placed the order on behalf of the Fund.

2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within ten
   (10) days after the end of the quarter, showing specifically the basis or
   bases upon which the allocation of orders for the purchase and sale of
   portfolio securities to named brokers or dealers was effected, and the
   division of brokerage commissions or other compensation on such purchase and
   sale orders. Such record:

    A. Shall include the consideration given to:

        (i)The sale of shares of the Fund by brokers or dealers.

       (ii)The supplying of services or benefits by brokers or dealers to:

            (a) The Fund;

            (b) The Manager (Liberty Asset Management Company);

            (c) The Portfolio Manager; and

            (d) Any person other than the foregoing.

       (iii)Any other consideration other than the technical qualifications of
            the brokers and dealers as such.

    B. Shall show the nature of the services or benefits made available.

    C. Shall describe in detail the application of any general or specific
       formula or other determinant used in arriving at such allocation of
       purchase and sale orders and such division of brokerage commissions or
       other compensation.

    D. The name of the  person  responsible  for  making  the  determination
       of such  allocation  and such  division  of  brokerage
       commissions or other compensation.

3. (Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum
   identifying the person or persons, committees or groups authorizing the
   purchase or sale of portfolio securities. Where an authorization is made by a
   committee or group, a record shall be kept of the names of its members who
   participate in the authorization. There shall be retained as part of this
   record: any memorandum, recommendation or instruction supporting or
   authorizing the purchase or sale of portfolio securities and such other
   information as is appropriate to support the authorization.1


<PAGE>



4. (Rule 31a-1(f)) Such accounts, books and other documents as are required to
   be maintained by registered investment advisers by rule adopted under Section
   204 of the Investment Advisers Act of 1940, to the extent such records are
   necessary or appropriate to record the Portfolio Manager's transactions with
   the Fund.

- ----------
1    Such information might include: the current Form 10-K, annual and quarterly
     reports,  press  releases,  reports by analysts  and from  brokerage  firms
     (including  their  recommendation:  i.e., buy, sell,  hold) or any internal
     reports or portfolio manager reviews.


<PAGE>



                                   SCHEDULE C

                              PORTFOLIO MANAGER FEE

    For services provided to the Fund Account, the Fund Manager will pay to the
Portfolio Manager, on or before the 10th day of each calendar month, a monthly
fee for the previous calendar month in the amount of 1/12(th) of: 0.40% of the
amount obtained by multiplying the Portfolio Manager's Percentage (as
hereinafter defined) times the Average Total Fund Net Assets (as hereinafter
defined) up to $400 million; 0.36% of the amount obtained by multiplying the
Portfolio Manager's Percentage times the Average Total Fund Net Assets exceeding
$400 million up to and including $800 million; 0.324% of the amount obtained by
multiplying the Portfolio Manager's Percentage times the Average Total Fund Net
Assets exceeding $800 million up to and including $1.2 billion; 0.292% of the
amount obtained by multiplying the Portfolio Manager's Percentage times the
Average Total Fund Net Assets exceeding $1.2 billion.

    "Portfolio Manager's Percentage" means the percentage obtained by dividing
(i) the average of the net asset values of the Fund Account as of the close of
the last business day of the New York Stock Exchange in each calendar week
during the preceding calendar month, by (ii) the Average Total Fund Net Assets.

    "Average Total Fund Net Assets" means the average of the net asset values of
the Fund as a whole as of the close of the last business day of the New York
Stock Exchange in each calendar week during the preceding calendar month.

    The fee shall be pro-rated for any month during which this Agreement is in
effect for only a portion of the month.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2G
<SEQUENCE>7
<FILENAME>oppen.txt
<DESCRIPTION>PORTFOLIO MANAGEMENT AGREEMENT W/OPPENHEIMER
<TEXT>

                         PORTFOLIO MANAGEMENT AGREEMENT

                                November 1, 2001

Oppenheimer Capital
1345 Avenue of the Americas
New York, NY  10105

Re: Portfolio Management Agreement

Ladies and Gentlemen:

    Liberty All-Star Equity Fund (the "Fund") is a diversified closed-end
investment company registered under the Investment Company Act of 1940 (the
"Act"), and is subject to the rules and regulations promulgated thereunder.

    Liberty Asset Management Company (the "Fund Manager") evaluates and
recommends portfolio managers for the assets of the Fund, and is responsible for
the day-to-day corporate management and Fund administration of the Fund.

    1. Employment as a Portfolio Manager. The Fund being duly authorized hereby
employs Oppenheimer Capital (the "Portfolio Manager") as a discretionary
portfolio manager, on the terms and conditions set forth herein, of that portion
of the Fund's assets which the Fund Manager determines to assign to the
Portfolio Manager (those assets being referred to as the "Portfolio Manager
Account"). The Fund Manager may, from time to time, allocate and reallocate the
Fund's assets among the Portfolio Manager and the other portfolio managers of
the Fund's assets.

    2. Acceptance of Employment; Standard of Performance. The Portfolio Manager
accepts its employment as a discretionary portfolio manager and agrees to use
its best professional judgment to make timely investment decisions for the
Portfolio Manager Account in accordance with the provisions of this Agreement.

    3. Portfolio Management Services of Portfolio Manager. In providing
portfolio management services to the Portfolio Manager Account, the Portfolio
Manager shall be subject to the investment objectives, policies and restrictions
of the Fund as set forth in its current Registration Statement under the Act, as
the same may be modified from time to time (the "Registration Statement"), and
the investment restrictions set forth in the Act and the Rules thereunder (as
and to the extent set forth in the Registration Statement or in other
documentation furnished to the Portfolio Manager by the Fund or the Fund
Manager), to the supervision and control of the Board of Trustees of the Fund,
and to instructions from the Fund Manager. The Portfolio Manager shall not,
without the prior approval of the Fund or the Fund Manager, effect any
transactions which would cause the Portfolio Manager Account, treated as a
separate fund, to be out of compliance with any of such restrictions or
policies.

    4. Transaction Procedures. All portfolio transactions for the Portfolio
Manager Account will be consummated by payment to or delivery by the custodian
of the Fund (the "Custodian"), or such depositories or agents as may be
designated by the Custodian in writing, as custodian for the Fund, of all cash
and/or securities due to or from the Portfolio Manager Account, and the
Portfolio Manager shall not have possession or custody thereof or any
responsibility or liability with respect to such custody. The Portfolio Manager
shall advise and confirm in writing to the Custodian all investment orders for
the Portfolio Manager Account placed by it with brokers and dealers at the time
and in the manner set forth in Schedule A hereto (as amended from time to time
by the Fund Manager). The Fund shall issue to the Custodian such instructions as
may be appropriate in connection with the settlement of any transaction
initiated by the Portfolio Manager. The Fund shall be responsible for all
custodial arrangements and the payment of all custodial charges and fees, and,
upon giving proper instructions to the Custodian, the Portfolio Manager shall
have no responsibility or liability with respect to custodial arrangements or
the acts, omissions or other conduct of the Custodian.

    5. Allocation of Brokerage. The Portfolio Manager shall have authority and
discretion to select brokers and dealers to execute portfolio transactions
initiated by the Portfolio Manager for the Portfolio Manager Account, and to
select the markets on or in which the transaction will be executed.

        A. In doing so, the Portfolio Manager's primary responsibility shall be
    to seek to obtain best net price and execution for the Fund. However, this
    responsibility shall not obligate the Portfolio Manager to solicit
    competitive bids for each transaction or to seek the lowest available
    commission cost to the Fund, so long as the Portfolio Manager reasonably
    believes that the broker or dealer selected by it can be expected to obtain
    a "best execution" market price on the particular transaction and determines
    in good faith that the commission cost is reasonable in relation to the
    value of the brokerage and research services (as defined in Section 28(e)(3)
    of the Securities Exchange Act of 1934) provided by such broker or dealer to
    the Portfolio Manager viewed in terms of either that particular transaction
    or of the Portfolio Manager's overall responsibilities with respect to its
    clients, including the Fund, as to which the Portfolio Manager exercises
    investment discretion, notwithstanding that the Fund may not be the direct
    or exclusive beneficiary of any such services or that another broker may be
    willing to charge the Fund a lower commission on the particular transaction.

        B. Subject to the requirements of paragraph A above, the Fund Manager
    shall have the right to request that transactions giving rise to brokerage
    commissions, in an amount to be agreed upon by the Fund Manager and the
    Portfolio Manager, shall be executed by brokers and dealers that provide
    brokerage or research services to the Fund Manager, or as to which an
    on-going relationship will be of value to the Fund in the management of its
    assets, which services and relationship may, but need not, be of direct
    benefit to the Portfolio Manager Account. Notwithstanding any other
    provision of this Agreement, the Portfolio Manager shall not be responsible
    under paragraph A above with respect to transactions executed through any
    such broker or dealer.

        C. The Portfolio Manager shall not execute any portfolio transactions
    for the Portfolio Manager Account with a broker or dealer which is an
    "affiliated person" (as defined in the Act) of the Fund, the Portfolio
    Manager or any other Portfolio Manager of the Fund without the prior written
    approval of the Fund. The Fund Manager will provide the Portfolio Manager
    with a list of brokers and dealers which are "affiliated persons" of the
    Fund or its Portfolio Managers.

    6. Proxies. The Portfolio Manager will vote all proxies solicited by or with
respect to the issuers of securities in which assets of the Portfolio Manager
Account may be invested from time to time in accordance with such policies as
shall be determined by the Fund Manager.

    7. Fees for Services. The compensation of the Portfolio Manager for its
services under this Agreement shall be calculated and paid by the Fund Manager
in accordance with the attached Schedule C. Pursuant to the Fund Management
Agreement between the Fund and the Fund Manager, the Fund Manager is solely
responsible for the payment of fees to the Portfolio Manager, and the Portfolio
Manager agrees to seek payment of its fees solely from the Fund Manager.

    8. Other Investment Activities of Portfolio Manager. The Fund acknowledges
that the Portfolio Manager or one or more of its affiliates has investment
responsibilities, renders investment advice to and performs other investment
advisory services for other individuals or entities ("Client Accounts"), and
that the Portfolio Manager, its affiliates or any of its or their directors,
officers, agents or employees may buy, sell or trade in any securities for its
or their respective accounts ("Affiliated Accounts"). Subject to the provisions
of paragraph 2 hereof, the Fund agrees that the Portfolio Manager or its
affiliates may give advice or exercise investment responsibility and take such
other action with respect to other Client Accounts and Affiliated Accounts which
may differ from the advice given or the timing or nature of action taken with
respect to the Portfolio Manager Account, provided that the Portfolio Manager
acts in good faith, and provided further, that it is the Portfolio Manager's
policy to allocate, within its reasonable discretion, investment opportunities
to the Portfolio Manager Account over a period of time on a fair and equitable
basis relative to the Client Accounts and the Affiliated Accounts, taking into
account the cash position and the investment objectives and policies of the Fund
and any specific investment restrictions applicable thereto. The Fund
acknowledges that one or more Client Accounts and Affiliated Accounts may at any
time hold, acquire, increase, decrease, dispose of or otherwise deal with
positions in investments in which the Portfolio Manager Account may have an
interest from time to time, whether in transactions which involve the Portfolio
Manager Account or otherwise. The Portfolio Manager shall have no obligation to
acquire for the Portfolio Manager Account a position in any investment which any
Client Account or Affiliated Account may acquire, and the Fund shall have no
first refusal, co-investment or other rights in respect of any such investment,
either for the Portfolio Manager Account or otherwise.

    9. Limitation of Liability. The Portfolio Manager shall not be liable for
any action taken, omitted or suffered to be taken by it in its reasonable
judgment, in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement, or in
accordance with (or in the absence of) specific directions or instructions from
the Fund, provided, however, that such acts or omissions shall not have resulted
from the Portfolio Manager's willful misfeasance, bad faith or gross negligence,
a violation of the standard of care established by and applicable to the
Portfolio Manager in its actions under this Agreement or breach of its duty or
of its obligations hereunder (provided, however, that the foregoing shall not be
construed to protect the Portfolio Manager from liability in violation of
Section 17(i) of the Act).

    10. Confidentiality. Subject to the duty of the Portfolio Manager and the
Fund to comply with applicable law, including any demand of any regulatory or
taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Portfolio Manager Account and the
actions of the Portfolio Manager and the Fund in respect thereof.

    11. Assignment. This Agreement shall terminate automatically in the event of
its assignment, as that term is defined in Section 2(a)(4) of the Act. The
Portfolio Manager shall notify the Fund in writing sufficiently in advance of
any proposed change of control, as defined in Section 2(a)(9) of the Act, as
will enable the Fund to consider whether an assignment as defined in Section
2(a)(4) of the Act will occur, and whether to take the steps necessary to enter
into a new contract with the Portfolio Manager.

     12.  Representations,  Warranties  and  Agreements  of the  Fund.  The Fund
represents, warrants and agrees that:

        A. The  Portfolio  Manager has been duly appointed to provide investment
    services to the  Portfolio  Manager  Account as
    contemplated hereby.

        B. The Fund will deliver to the Portfolio Manager a true and complete
    copy of its then current registration statement as effective from time to
    time and such other documents governing the investment of the Fund Account
    and such other information as is necessary for the Portfolio Manager to
    carry out its obligations under this Agreement.

     13.  Representations,  Warranties and Agreements of the Portfolio  Manager.
The Portfolio Manager represents, warrants and agrees
        that:

        A. It is registered as an "Investment Adviser" under the Investment
    Advisers Act of 1940 ("Advisers Act").

        B. It will maintain, keep current and preserve on behalf of the Fund, in
    the manner required or permitted by the Act and the Rules thereunder, the
    records identified in Schedule B (as Schedule B may be amended from time to
    time by the Fund Manager). The Portfolio Manager agrees that such records
    are the property of the Fund, and will be surrendered to the Fund promptly
    upon request.

        C. It will adopt a written code of ethics complying with the
    requirements of Rule 17j-1 under the 1940 Act. Within 45 days of the end of
    each year while this Agreement is in effect, an officer or general partner
    of the Portfolio Manager shall certify to the Fund that the Portfolio
    Manager has complied with the requirements of Rule 17j-1 during the previous
    year and that there has been no violation of its code of ethics or, if such
    a violation has occurred, that appropriate action was taken in response to
    such violation.

        D. Upon request, the Portfolio Manager will promptly supply the Fund
    with any information concerning the Portfolio Manager and its stockholders,
    employees and affiliates which the Fund may reasonably require in connection
    with the preparation of its Registration Statement or amendments thereto,
    proxy material, reports and other documents required to be filed under the
    Act, the Securities Act of 1933, or other applicable securities laws.

        E. Reference is hereby made to the Declaration of Trust dated August 20,
    1986 establishing the Fund, a copy of which has been filed with the
    Secretary of the Commonwealth of Massachusetts and elsewhere as required by
    law, and to any and all amendments thereto so filed or hereafter filed. The
    name Liberty All-Star Equity Fund refers to the Trustees under said
    Declaration of Trust, as Trustees and not personally, and no Trustee,
    shareholder, officer, agent or employee of the Fund shall be held to any
    personal liability hereunder or in connection with the affairs of the Fund,
    but only the trust estate under said Declaration of Trust is liable under
    this Agreement. Without limiting the generality of the foregoing, neither
    the Portfolio Manager nor any of its officers, directors, partners,
    shareholders or employees shall, under any circumstances, have recourse or
    cause or willingly permit recourse to be had directly or indirectly to any
    personal, statutory, or other liability of any shareholder, Trustee,
    officer, agent or employee of the Fund or of any successor of the Fund,
    whether such liability now exists or is hereafter incurred for claims
    against the trust estate, but shall look for payment solely to said trust
    estate, or the assets of such successor of the Fund.

    14. Amendment. This Agreement may be amended at any time, but only by
written agreement among the Portfolio Manager, the Fund Manager and the Fund,
which amendment, other than amendments to Schedules A and B, is subject to the
approval of the Board of Trustees and the Shareholders of the Fund as and to the
extent required by the Act.

    15. Effective Date; Term. This Agreement shall continue until July 31, 2003
and from year to year thereafter provided such continuance is specifically
approved at least annually by (i) the Fund's Board of Trustees or (ii) a vote of
a "majority" (as defined in the Act) of the Fund's outstanding voting
securities, provided that in either event such continuance is also approved by a
majority of the Board of Trustees who are not "interested persons" (as defined
in the Act) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval and provided further that, in
accordance with the conditions of the application of the Fund and Fund Manager
for an exemption from 15(a) of the Act (Rel. Nos. IC 19436 and 19491), the
continuance of this Agreement shall be subject to approval by such "majority" of
the Fund's outstanding voting securities at the regularly scheduled annual
meeting of shareholders of the Fund next following the date of this Agreement.
The aforesaid requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner consistent with the
Act and the Rules and Regulations thereunder.

    16. Termination. This Agreement may be terminated by any party, without
penalty, immediately upon written notice to the other parties in the event of a
breach of any provision thereof by a party so notified, or otherwise upon not
less than thirty (30) days' written notice to the Portfolio Manager in the case
of termination by the Fund or the Fund Manager, or ninety (90) days' written
notice to the Fund and the Fund Manager in the case of termination by the
Portfolio Manager, but any such termination shall not affect the status,
obligations or liabilities of any party hereto to the other parties.

    17. Applicable Law. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter enacted, as
the same may be amended from time to time, this Agreement shall be administered,
construed and enforced according to the laws of the Commonwealth of
Massachusetts.

    18. Severability. If any term or condition of this Agreement shall be
invalid or unenforceable to any extent or in any application, then the remainder
of this Agreement, and such term or condition except to such extent or in such
application, shall not be affected thereby, and each and every term and
condition of this Agreement shall be valid and enforced to the fullest extent
and in the broadest application permitted by law.


                                 LIBERTY ALL-STAR EQUITY FUND

                                 By: ________________________________________
                                 Title:

                                 LIBERTY ASSET MANAGEMENT COMPANY

                                 By: ________________________________________
                                 Title:

ACCEPTED:

OPPENHEIMER CAPITAL

By: ________________________________________
Title:

OPPENHEIMER CAPITAL

By: ________________________________________
Title:



SCHEDULES:   A.   Operational Procedures For Portfolio Transactions [omitted]
             B.   Record Keeping Requirements
             C.   Fee Schedule







<PAGE>



                          LIBERTY ALL-STAR EQUITY FUND

                         Portfolio Management Agreement
                                   SCHEDULE B

RECORDS TO BE MAINTAINED BY THE PORTFOLIO MANAGER

1. (Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all other
   portfolio purchases and sales, given by the Portfolio Manager on behalf of
   the Fund for, or in connection with, the purchase or sale of securities,
   whether executed or unexecuted. Such records shall include:

    A. The name of the broker;

    B. The terms and conditions of the order and of any modifications or
       cancellation thereof;

    C. The time of entry or cancellation;

    D. The price at which executed;

    E. The time of receipt of a report of execution; and

    F. The name of the person who placed the order on behalf of the Fund.

2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within ten
   (10) days after the end of the quarter, showing specifically the basis or
   bases upon which the allocation of orders for the purchase and sale of
   portfolio securities to named brokers or dealers was effected, and the
   division of brokerage commissions or other compensation on such purchase and
   sale orders. Such record:

    A. Shall include the consideration given to:

        (i)The sale of shares of the Fund by brokers or dealers.

       (ii)The supplying of services or benefits by brokers or dealers to:

            (a) The Fund;

            (b) The Manager (Liberty Asset Management Company);

            (c) The Portfolio Manager; and

            (d) Any person other than the foregoing.

      (iii)Any other consideration other than the technical qualifications of
           the brokers and dealers as such.

    B. Shall show the nature of the services or benefits made available.

    C. Shall describe in detail the application of any general or specific
       formula or other determinant used in arriving at such allocation of
       purchase and sale orders and such division of brokerage commissions or
       other compensation.

    D. The name of the  person  responsible  for  making  the  determination of
       such  allocation  and such  division  of  brokerage
       commissions or other compensation.

3. (Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum
   identifying the person or persons, committees or groups authorizing the
   purchase or sale of portfolio securities. Where an authorization is made by a
   committee or group, a record shall be kept of the names of its members who
   participate in the authorization. There shall be retained as part of this
   record: any memorandum, recommendation or instruction supporting or
   authorizing the purchase or sale of portfolio securities and such other
   information as is appropriate to support the authorization.1

4. (Rule 31a-1(f)) Such accounts, books and other documents as are required to
   be maintained by registered investment advisers by rule adopted under Section
   204 of the Investment Advisers Act of 1940, to the extent such records are
   necessary or appropriate to record the Portfolio Manager's transactions with
   the Fund.

- ----------
1    Such information might include: the current Form 10-K, annual and quarterly
     reports,  press  releases,  reports by analysts  and from  brokerage  firms
     (including  their  recommendation:  i.e., buy, sell,  hold) or any internal
     reports or portfolio manager reviews.


<PAGE>



                                   SCHEDULE C

                              PORTFOLIO MANAGER FEE

    For services provided to the Fund Account, the Fund Manager will pay to the
Portfolio Manager, on or before the 10th day of each calendar month, a monthly
fee for the previous calendar month in the amount of 1/12(th) of: 0.40% of the
amount obtained by multiplying the Portfolio Manager's Percentage (as
hereinafter defined) times the Average Total Fund Net Assets (as hereinafter
defined) up to $400 million; 0.36% of the amount obtained by multiplying the
Portfolio Manager's Percentage times the Average Total Fund Net Assets exceeding
$400 million up to and including $800 million; 0.324% of the amount obtained by
multiplying the Portfolio Manager's Percentage times the Average Total Fund Net
Assets exceeding $800 million up to and including $1.2 billion; 0.292% of the
amount obtained by multiplying the Portfolio Manager's Percentage times the
Average Total Fund Net Assets exceeding $1.2 billion.

    "Portfolio Manager's Percentage" means the percentage obtained by dividing
(i) the average of the net asset values of the Fund Account as of the close of
the last business day of the New York Stock Exchange in each calendar week
during the preceding calendar month, by (ii) the Average Total Fund Net Assets.

    "Average Total Fund Net Assets" means the average of the net asset values of
the Fund as a whole as of the close of the last business day of the New York
Stock Exchange in each calendar week during the preceding calendar month.

    The fee shall be pro-rated for any month during which this Agreement is in
effect for only a portion of the month.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2G
<SEQUENCE>8
<FILENAME>west.txt
<DESCRIPTION>PORTFOLIO MANAGEMENT AGREEMENT W/WESTWOOD
<TEXT>


                         PORTFOLIO MANAGEMENT AGREEMENT

                                November 1, 2001

Westwood Management Corporation
300 Crescent Court
Dallas, TX  75201

Re: Portfolio Management Agreement

Ladies and Gentlemen:

    Liberty All-Star Equity Fund (the "Fund") is a diversified closed-end
investment company registered under the Investment Company Act of 1940 (the
"Act"), and is subject to the rules and regulations promulgated thereunder.

    Liberty Asset Management Company (the "Fund Manager") evaluates and
recommends portfolio managers for the assets of the Fund, and is responsible for
the day-to-day corporate management and Fund administration of the Fund.

    1. Employment as a Portfolio Manager. The Fund being duly authorized hereby
employs Westwood Management Corporation (the "Portfolio Manager") as a
discretionary portfolio manager, on the terms and conditions set forth herein,
of that portion of the Fund's assets which the Fund Manager determines to assign
to the Portfolio Manager (those assets being referred to as the "Portfolio
Manager Account"). The Fund Manager may, from time to time, allocate and
reallocate the Fund's assets among the Portfolio Manager and the other portfolio
managers of the Fund's assets.

    2. Acceptance of Employment; Standard of Performance. The Portfolio Manager
accepts its employment as a discretionary portfolio manager and agrees to use
its best professional judgment to make timely investment decisions for the
Portfolio Manager Account in accordance with the provisions of this Agreement.

    3. Portfolio Management Services of Portfolio Manager. In providing
portfolio management services to the Portfolio Manager Account, the Portfolio
Manager shall be subject to the investment objectives, policies and restrictions
of the Fund as set forth in its current Registration Statement under the Act, as
the same may be modified from time to time (the "Registration Statement"), and
the investment restrictions set forth in the Act and the Rules thereunder (as
and to the extent set forth in the Registration Statement or in other
documentation furnished to the Portfolio Manager by the Fund or the Fund
Manager), to the supervision and control of the Board of Trustees of the Fund,
and to instructions from the Fund Manager. The Portfolio Manager shall not,
without the prior approval of the Fund or the Fund Manager, effect any
transactions which would cause the Portfolio Manager Account, treated as a
separate fund, to be out of compliance with any of such restrictions or
policies.

    4. Transaction Procedures. All portfolio transactions for the Portfolio
Manager Account will be consummated by payment to or delivery by the custodian
of the Fund (the "Custodian"), or such depositories or agents as may be
designated by the Custodian in writing, as custodian for the Fund, of all cash
and/or securities due to or from the Portfolio Manager Account, and the
Portfolio Manager shall not have possession or custody thereof or any
responsibility or liability with respect to such custody. The Portfolio Manager
shall advise and confirm in writing to the Custodian all investment orders for
the Portfolio Manager Account placed by it with brokers and dealers at the time
and in the manner set forth in Schedule A hereto (as amended from time to time
by the Fund Manager). The Fund shall issue to the Custodian such instructions as
may be appropriate in connection with the settlement of any transaction
initiated by the Portfolio Manager. The Fund shall be responsible for all
custodial arrangements and the payment of all custodial charges and fees, and,
upon giving proper instructions to the Custodian, the Portfolio Manager shall
have no responsibility or liability with respect to custodial arrangements or
the acts, omissions or other conduct of the Custodian.

    5. Allocation of Brokerage. The Portfolio Manager shall have authority and
discretion to select brokers and dealers to execute portfolio transactions
initiated by the Portfolio Manager for the Portfolio Manager Account, and to
select the markets on or in which the transaction will be executed.

        A. In doing so, the Portfolio Manager's primary responsibility shall be
    to seek to obtain best net price and execution for the Fund. However, this
    responsibility shall not obligate the Portfolio Manager to solicit
    competitive bids for each transaction or to seek the lowest available
    commission cost to the Fund, so long as the Portfolio Manager reasonably
    believes that the broker or dealer selected by it can be expected to obtain
    a "best execution" market price on the particular transaction and determines
    in good faith that the commission cost is reasonable in relation to the
    value of the brokerage and research services (as defined in Section 28(e)(3)
    of the Securities Exchange Act of 1934) provided by such broker or dealer to
    the Portfolio Manager viewed in terms of either that particular transaction
    or of the Portfolio Manager's overall responsibilities with respect to its
    clients, including the Fund, as to which the Portfolio Manager exercises
    investment discretion, notwithstanding that the Fund may not be the direct
    or exclusive beneficiary of any such services or that another broker may be
    willing to charge the Fund a lower commission on the particular transaction.

        B. Subject to the requirements of paragraph A above, the Fund Manager
    shall have the right to request that transactions giving rise to brokerage
    commissions, in an amount to be agreed upon by the Fund Manager and the
    Portfolio Manager, shall be executed by brokers and dealers that provide
    brokerage or research services to the Fund Manager, or as to which an
    on-going relationship will be of value to the Fund in the management of its
    assets, which services and relationship may, but need not, be of direct
    benefit to the Portfolio Manager Account. Notwithstanding any other
    provision of this Agreement, the Portfolio Manager shall not be responsible
    under paragraph A above with respect to transactions executed through any
    such broker or dealer.

        C. The Portfolio Manager shall not execute any portfolio transactions
    for the Portfolio Manager Account with a broker or dealer which is an
    "affiliated person" (as defined in the Act) of the Fund, the Portfolio
    Manager or any other Portfolio Manager of the Fund without the prior written
    approval of the Fund. The Fund Manager will provide the Portfolio Manager
    with a list of brokers and dealers which are "affiliated persons" of the
    Fund or its Portfolio Managers.

    6. Proxies. The Portfolio Manager will vote all proxies solicited by or with
respect to the issuers of securities in which assets of the Portfolio Manager
Account may be invested from time to time in accordance with such policies as
shall be determined by the Fund Manager.

    7. Fees for Services. The compensation of the Portfolio Manager for its
services under this Agreement shall be calculated and paid by the Fund Manager
in accordance with the attached Schedule C. Pursuant to the Fund Management
Agreement between the Fund and the Fund Manager, the Fund Manager is solely
responsible for the payment of fees to the Portfolio Manager, and the Portfolio
Manager agrees to seek payment of its fees solely from the Fund Manager.

    8. Other Investment Activities of Portfolio Manager. The Fund acknowledges
that the Portfolio Manager or one or more of its affiliates has investment
responsibilities, renders investment advice to and performs other investment
advisory services for other individuals or entities ("Client Accounts"), and
that the Portfolio Manager, its affiliates or any of its or their directors,
officers, agents or employees may buy, sell or trade in any securities for its
or their respective accounts ("Affiliated Accounts"). Subject to the provisions
of paragraph 2 hereof, the Fund agrees that the Portfolio Manager or its
affiliates may give advice or exercise investment responsibility and take such
other action with respect to other Client Accounts and Affiliated Accounts which
may differ from the advice given or the timing or nature of action taken with
respect to the Portfolio Manager Account, provided that the Portfolio Manager
acts in good faith, and provided further, that it is the Portfolio Manager's
policy to allocate, within its reasonable discretion, investment opportunities
to the Portfolio Manager Account over a period of time on a fair and equitable
basis relative to the Client Accounts and the Affiliated Accounts, taking into
account the cash position and the investment objectives and policies of the Fund
and any specific investment restrictions applicable thereto. The Fund
acknowledges that one or more Client Accounts and Affiliated Accounts may at any
time hold, acquire, increase, decrease, dispose of or otherwise deal with
positions in investments in which the Portfolio Manager Account may have an
interest from time to time, whether in transactions which involve the Portfolio
Manager Account or otherwise. The Portfolio Manager shall have no obligation to
acquire for the Portfolio Manager Account a position in any investment which any
Client Account or Affiliated Account may acquire, and the Fund shall have no
first refusal, co-investment or other rights in respect of any such investment,
either for the Portfolio Manager Account or otherwise.

    9. Limitation of Liability. The Portfolio Manager shall not be liable for
any action taken, omitted or suffered to be taken by it in its reasonable
judgment, in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement, or in
accordance with (or in the absence of) specific directions or instructions from
the Fund, provided, however, that such acts or omissions shall not have resulted
from the Portfolio Manager's willful misfeasance, bad faith or gross negligence,
a violation of the standard of care established by and applicable to the
Portfolio Manager in its actions under this Agreement or breach of its duty or
of its obligations hereunder (provided, however, that the foregoing shall not be
construed to protect the Portfolio Manager from liability in violation of
Section 17(i) of the Act).

    10. Confidentiality. Subject to the duty of the Portfolio Manager and the
Fund to comply with applicable law, including any demand of any regulatory or
taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Portfolio Manager Account and the
actions of the Portfolio Manager and the Fund in respect thereof.

    11. Assignment. This Agreement shall terminate automatically in the event of
its assignment, as that term is defined in Section 2(a)(4) of the Act. The
Portfolio Manager shall notify the Fund in writing sufficiently in advance of
any proposed change of control, as defined in Section 2(a)(9) of the Act, as
will enable the Fund to consider whether an assignment as defined in Section
2(a)(4) of the Act will occur, and whether to take the steps necessary to enter
into a new contract with the Portfolio Manager.

     12.  Representations,  Warranties  and  Agreements  of the  Fund.  The Fund
represents, warrants and agrees that:

          A. The Portfolio Manager has been duly appointed to provide investment
     services to the Portfolio Manager Account as contemplated hereby.

        B. The Fund will deliver to the Portfolio Manager a true and complete
    copy of its then current registration statement as effective from time to
    time and such other documents governing the investment of the Fund Account
    and such other information as is necessary for the Portfolio Manager to
    carry out its obligations under this Agreement.

     13.  Representations,  Warranties and Agreements of the Portfolio  Manager.
The Portfolio Manager represents, warrants and agrees that:

          A. It is registered as an  "Investment  Adviser"  under the Investment
     Advisers Act of 1940 ("Advisers Act").

        B. It will maintain, keep current and preserve on behalf of the Fund, in
    the manner required or permitted by the Act and the Rules thereunder, the
    records identified in Schedule B (as Schedule B may be amended from time to
    time by the Fund Manager). The Portfolio Manager agrees that such records
    are the property of the Fund, and will be surrendered to the Fund promptly
    upon request.

        C. It will adopt a written code of ethics complying with the
    requirements of Rule 17j-1 under the 1940 Act. Within 45 days of the end of
    each year while this Agreement is in effect, an officer or general partner
    of the Portfolio Manager shall certify to the Fund that the Portfolio
    Manager has complied with the requirements of Rule 17j-1 during the previous
    year and that there has been no violation of its code of ethics or, if such
    a violation has occurred, that appropriate action was taken in response to
    such violation.

        D. Upon request, the Portfolio Manager will promptly supply the Fund
    with any information concerning the Portfolio Manager and its stockholders,
    employees and affiliates which the Fund may reasonably require in connection
    with the preparation of its Registration Statement or amendments thereto,
    proxy material, reports and other documents required to be filed under the
    Act, the Securities Act of 1933, or other applicable securities laws.

        E. Reference is hereby made to the Declaration of Trust dated August 20,
    1986 establishing the Fund, a copy of which has been filed with the
    Secretary of the Commonwealth of Massachusetts and elsewhere as required by
    law, and to any and all amendments thereto so filed or hereafter filed. The
    name Liberty All-Star Equity Fund refers to the Trustees under said
    Declaration of Trust, as Trustees and not personally, and no Trustee,
    shareholder, officer, agent or employee of the Fund shall be held to any
    personal liability hereunder or in connection with the affairs of the Fund,
    but only the trust estate under said Declaration of Trust is liable under
    this Agreement. Without limiting the generality of the foregoing, neither
    the Portfolio Manager nor any of its officers, directors, partners,
    shareholders or employees shall, under any circumstances, have recourse or
    cause or willingly permit recourse to be had directly or indirectly to any
    personal, statutory, or other liability of any shareholder, Trustee,
    officer, agent or employee of the Fund or of any successor of the Fund,
    whether such liability now exists or is hereafter incurred for claims
    against the trust estate, but shall look for payment solely to said trust
    estate, or the assets of such successor of the Fund.

    14. Amendment. This Agreement may be amended at any time, but only by
written agreement among the Portfolio Manager, the Fund Manager and the Fund,
which amendment, other than amendments to Schedules A and B, is subject to the
approval of the Board of Trustees and the Shareholders of the Fund as and to the
extent required by the Act.

    15. Effective Date; Term. This Agreement shall continue until July 31, 2003
and from year to year thereafter provided such continuance is specifically
approved at least annually by (i) the Fund's Board of Trustees or (ii) a vote of
a "majority" (as defined in the Act) of the Fund's outstanding voting
securities, provided that in either event such continuance is also approved by a
majority of the Board of Trustees who are not "interested persons" (as defined
in the Act) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval and provided further that, in
accordance with the conditions of the application of the Fund and Fund Manager
for an exemption from 15(a) of the Act (Rel. Nos. IC 19436 and 19491), the
continuance of this Agreement shall be subject to approval by such "majority" of
the Fund's outstanding voting securities at the regularly scheduled annual
meeting of shareholders of the Fund next following the date of this Agreement.
The aforesaid requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner consistent with the
Act and the Rules and Regulations thereunder.

    16. Termination. This Agreement may be terminated by any party, without
penalty, immediately upon written notice to the other parties in the event of a
breach of any provision thereof by a party so notified, or otherwise upon not
less than thirty (30) days' written notice to the Portfolio Manager in the case
of termination by the Fund or the Fund Manager, or ninety (90) days' written
notice to the Fund and the Fund Manager in the case of termination by the
Portfolio Manager, but any such termination shall not affect the status,
obligations or liabilities of any party hereto to the other parties.

    17. Applicable Law. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter enacted, as
the same may be amended from time to time, this Agreement shall be administered,
construed and enforced according to the laws of the Commonwealth of
Massachusetts.

    18. Severability. If any term or condition of this Agreement shall be
invalid or unenforceable to any extent or in any application, then the remainder
of this Agreement, and such term or condition except to such extent or in such
application, shall not be affected thereby, and each and every term and
condition of this Agreement shall be valid and enforced to the fullest extent
and in the broadest application permitted by law.


                                 LIBERTY ALL-STAR EQUITY FUND

                                 By: ________________________________________
                                 Title:

                                 LIBERTY ASSET MANAGEMENT COMPANY

                                 By: ________________________________________
                                 Title:

ACCEPTED:

WESTWOOD MANAGEMENT CORPORATION

By: ________________________________________
Title:

WESTWOOD MANAGEMENT CORPORATION

By: ________________________________________
Title:



SCHEDULES:    A.   Operational Procedures For Portfolio Transactions [omitted]
              B.   Record Keeping Requirements
              C.   Fee Schedule










<PAGE>








                          LIBERTY ALL-STAR EQUITY FUND

                         Portfolio Management Agreement
                                   SCHEDULE B

RECORDS TO BE MAINTAINED BY THE PORTFOLIO MANAGER

1. (Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all other
   portfolio purchases and sales, given by the Portfolio Manager on behalf of
   the Fund for, or in connection with, the purchase or sale of securities,
   whether executed or unexecuted. Such records shall include:

    A. The name of the broker;

    B. The terms and conditions of the order and of any modifications or
       cancellation thereof;

    C. The time of entry or cancellation;

    D. The price at which executed;

    E. The time of receipt of a report of execution; and

    F. The name of the person who placed the order on behalf of the Fund.

2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within ten
   (10) days after the end of the quarter, showing specifically the basis or
   bases upon which the allocation of orders for the purchase and sale of
   portfolio securities to named brokers or dealers was effected, and the
   division of brokerage commissions or other compensation on such purchase and
   sale orders. Such record:

    A. Shall include the consideration given to:

        (i)The sale of shares of the Fund by brokers or dealers.

       (ii)The supplying of services or benefits by brokers or dealers to:

            (a) The Fund;

            (b) The Manager (Liberty Asset Management Company);

            (c) The Portfolio Manager; and

            (d) Any person other than the foregoing.

      (iii)Any other consideration other than the technical qualifications of
           the brokers and dealers as such.

    B. Shall show the nature of the services or benefits made available.

    C. Shall describe in detail the application of any general or specific
       formula or other determinant used in arriving at such allocation of
       purchase and sale orders and such division of brokerage commissions or
       other compensation.

    D. The name of the  person  responsible  for  making  the  determination of
       such  allocation  and such  division  of  brokerage
       commissions or other compensation.

3. (Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum
   identifying the person or persons, committees or groups authorizing the
   purchase or sale of portfolio securities. Where an authorization is made by a
   committee or group, a record shall be kept of the names of its members who
   participate in the authorization. There shall be retained as part of this
   record: any memorandum, recommendation or instruction supporting or
   authorizing the purchase or sale of portfolio securities and such other
   information as is appropriate to support the authorization.1

4. (Rule 31a-1(f)) Such accounts, books and other documents as are required to
   be maintained by registered investment advisers by rule adopted under Section
   204 of the Investment Advisers Act of 1940, to the extent such records are
   necessary or appropriate to record the Portfolio Manager's transactions with
   the Fund.

- ----------
1    Such information might include: the current Form 10-K, annual and quarterly
     reports,  press  releases,  reports by analysts  and from  brokerage  firms
     (including  their  recommendation:  i.e., buy, sell,  hold) or any internal
     reports or portfolio manager reviews.


<PAGE>



                                   SCHEDULE C

                              PORTFOLIO MANAGER FEE

    For services provided to the Fund Account, the Fund Manager will pay to the
Portfolio Manager, on or before the 10th day of each calendar month, a monthly
fee for the previous calendar month in the amount of 1/12(th) of: 0.40% of the
amount obtained by multiplying the Portfolio Manager's Percentage (as
hereinafter defined) times the Average Total Fund Net Assets (as hereinafter
defined) up to $400 million; 0.36% of the amount obtained by multiplying the
Portfolio Manager's Percentage times the Average Total Fund Net Assets exceeding
$400 million up to and including $800 million; 0.324% of the amount obtained by
multiplying the Portfolio Manager's Percentage times the Average Total Fund Net
Assets exceeding $800 million up to and including $1.2 billion; 0.292% of the
amount obtained by multiplying the Portfolio Manager's Percentage times the
Average Total Fund Net Assets exceeding $1.2 billion.

    "Portfolio Manager's Percentage" means the percentage obtained by dividing
(i) the average of the net asset values of the Fund Account as of the close of
the last business day of the New York Stock Exchange in each calendar week
during the preceding calendar month, by (ii) the Average Total Fund Net Assets.

    "Average Total Fund Net Assets" means the average of the net asset values of
the Fund as a whole as of the close of the last business day of the New York
Stock Exchange in each calendar week during the preceding calendar month.

    The fee shall be pro-rated for any month during which this Agreement is in
effect for only a portion of the month.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2B
<SEQUENCE>9
<FILENAME>bylaws.txt
<DESCRIPTION>AMENDED BY-LAWS
<TEXT>
                                Amended October 27, 1999: Article VI, Section 1,
                                               Appointment of Assistant Officers
                                  Amended June 20, 2001: Article VI, Section 12,
                                         Controller and Chief Accounting Officer


                                    Restated

                                     BY-LAWS

                                       OF

                          LIBERTY ALL-STAR EQUITY FUND

                        As amended through April 18, 1996


                                    ARTICLE I

                                   DEFINITIONS

The terms "Commission", "Custodian", "Declaration", "Distributor", "Investment
Adviser", "Majority Shareholder Vote", "1940 Act", "Shareholder", "Shares",
"Transfer Agent", "Trust", "Trust Property" and "Trustees" have the respective
meanings given them in the Declaration of Trust of Liberty all-star Equity Fund
dated August 20, 1986, as amended from time to time.

                                   ARTICLE II
                                     OFFICES


     Section 1. Principal Office.  Until changes by the Trustees,  the principal
office of the Trust in The Commonwealth of Massachusetts shall be in the City of
Boston, County of Suffolk.

     Section 2. Other  Offices.  The Trust may have offices in such other places
without as well as within The Commonwealth as the Trustees may from time to time
determine.

                                   ARTICLE III

                                  SHAREHOLDERS

         Section 1. Meetings. An annual meeting of the Shareholders shall be
held at such place within or without the Commonwealth of Massachusetts on such
date and at such time as the Trustee shall designate. Special meetings of the
Shareholders may be called at any time by a majority of the Trustees and shall
be called by any Trustee upon written request of Shareholders holding in the
aggregate no less than ten percent (10%) of the outstanding Shares having voting
rights, such request specifying the purpose or purposes for which such meeting
is to be called. Any such meeting shall be held within or without the
Commonwealth of Massachusetts on such date and at such time as the Trustees
shall designate. The holders of a majority of outstanding Shares present in
person or by proxy shall constitute a quorum at any meeting of the Shareholders.

         Section 2. Notice of Meetings. Notice of all meetings of the
Shareholders, stating the time, place and purposes of the meeting, shall be
given by the Trustees by mail to each Shareholder at his address as recorded on
the register of the Trust, mailed at least ten (10) days and not more than sixty
(60) days before the meeting. Only the business stated in the notice of the
meeting shall be considered at such meeting. Any adjourned meeting may be held
as adjourned without further notice. No notice need be given to any Shareholder
who shall have failed to inform the Trust of his current address or if a written
waiver of notice, executed before or after the meeting by the Shareholder or his
attorney thereunto authorized, is filed with the records of the meeting.

         Section 3. Record Date for Meeting. For the purpose of determining the
Shareholders who are entitled to notice of an to vote at any meeting, or to
participate in any distribution, or for the purpose of any other action, the
Trustees may from time to time close the transfer books for such period, not
exceeding thirty (30) days, as the Trustees may determine; or without closing
the transfer books the Trustees may fix a date not more than ninety (90) days
prior to the date of any meeting of Shareholders or distribution or other action
as a record date for the determination of the persons to be treated as
Shareholders of record for such purposes.

         Section 4. Proxies. At any meeting of Shareholders, any holder of
Shares entitled to vote thereat may vote by proxy, provided that no proxy shall
be voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of a majority of the Trustees, proxies may be solicited
in the name of one or more Trustees or one or more of the officers of the Trust.
Only Shareholders of record shall be entitled to vote. Each full Share shall be
entitled to one vote and fractional Shares shall be entitled to a vote of such
fraction. When any Share is held jointly by several persons, any one of them may
vote at any meeting in person or by proxy in respect to such Share, but if more
than one of them shall be present at such meeting in person or proxy, and such
joint owners or their proxies so present disagree as to any vote to be cast,
such vote shall not be received in respect of such Share. A proxy purporting to
be executed by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise, and the burden of proving invalidity
shall rest on the challenger. If the holder of any such Share is a minor or a
person of unsound mind, and subject to guardianship or to the legal control of
any other person as regards the charge or management of such Share, he may vote
by his guardian or such other person appointed or having such control, and such
vote may be given in person or by proxy. The placing of a shareholder's name on
a proxy pursuant to telephonic or electronically transmitted instructions
obtained pursuant to procedures reasonably designed to verify that such
instructions have been authorized by such shareholder shall constitute execution
or signature of such proxy by or on behalf of such shareholder.

         Section 5.  Inspection of Records.  The records of the Trust shall be
open to inspection by Shareholders to the same extent
as is permitted shareholders of a Massachusetts business corporation.

                                   ARTICLE IV

                                    TRUSTEES

         Section 1. Meetings of the Trustees. The Trustees may in their
discretion provide for regular or stated meetings of the Trustees. Notice of
regular or stated meetings need not be given. Meetings of the Trustees other
than regular or stated meetings shall be held whenever called by the President,
or by any one of the Trustees, at the time being in office. Notice of the time
and place of each meeting other than regular or stated meetings shall be given
by the Secretary or an Assistant Secretary or by the officer or Trustee calling
the meeting and shall be mailed to each Trustee at least two days before the
meeting, or shall be telegraphed, cabled, or wirelessed to each Trustee at his
business address, or personally delivered to him at least one day before the
meeting. Such notice may, however, be waived by any Trustee. Notice of a meeting
need not be given to any Trustee if a written waiver of notice, executed by him
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him. A notice or waiver of notice need not
specify the purpose of any meeting. The Trustees may meet by means of a
telephone conference circuit or similar communications equipment by means of
which all persons participating in the meeting can hear each other, which
telephone conference meeting shall be deemed to have been held at a place
designated by the Trustees at the meeting. Participation in a telephone
conference meeting shall constitute presence in person at such meeting. Any
action required or permitted to be taken at any meeting of the Trustees may be
taken by the Trustees without a meeting if all the Trustees consent to the
action in writing and the written consents are filed with the records of the
Trustees' meetings. Such consents shall be treated as a vote for all purposes.

         Section 2. Quorum and Manner of Acting. A majority of the Trustees
shall be present in person at any regular or special meeting of the Trustees in
order to constitute a quorum for the transaction of business at such meeting and
(except as otherwise required by law, the Declaration or these By-Laws) the act
of a majority of the Trustees present at any such meeting, at which a quorum is
present, shall be the act of the Trustees. In the absence of a quorum, a
majority of the Trustees present may adjourn the meeting from time to time until
a quorum shall be present. Notice of an adjourned meeting need not be given.




<PAGE>



                                    ARTICLE V

                          COMMITTEES AND ADVISORY BOARD

         Section 1. Executive and Other Committees. The Trustees by vote of a
majority of all the Trustees may elect from their own number an Executive
Committee to consist of not less than three (3) to hold office at the pleasure
of the Trustees, which shall have the power to conduct the current and ordinary
business of the Trust while the Trustees are not in session, including the
purchase and sale of securities and such other powers of the Trustees as the
Trustees may, from time to time, delegate to them except those powers which by
law, the Declaration or these By-Laws they are prohibited from delegating. The
Trustees may also elect from their own number other Committees from time to
time, the number composing such Committees, the powers conferred upon the same
(subject to the same limitations as with respect to the Executive Committee) and
the term of membership on such Committees to be determined by the Trustees. The
Trustees may designate a Chairman of any such Committee. In the absence of such
designation the Committee may elect its own Chairman.

         Section 2. Meeting, Quorum and Manner of Acting. The Trustees may (1)
provide for stated meetings of any Committees, (2) specify the manner of calling
and notice required for special meetings of any Committee, (3) specify the
number of members of a Committee required to constitute a quorum and the number
of members of a Committee required to exercise specified powers delegated to
such Committee, (4) authorize the making of decisions to exercise specified
powers by written assent of the requisite number of members of a Committee
without a meeting, and (5) authorize the members of a Committee to meet by means
of a telephone conference circuit.

         The Executive Committee shall keep regular minutes of its meetings and
records of decisions taken without a meeting and cause them to be recorded in a
book designated for that purpose and kept in the office of the Trust.

         Section 3. Advisory Board. The Trustees may appoint an Advisory Board
to consist in the first instance of not less than three (3) members. Members of
such Advisory Board shall not be Trustees or officers and need not be
Shareholders. Members of this Board shall hold office for such period as the
Trustees may by resolution provide. Any member of such Board may resign
therefrom by a written instrument signed by him which shall take effect upon
delivery to the Trustees. The Advisory Board shall have no legal powers and
shall not perform the functions of Trustees in any manner, said Board being
intended merely to act in an advisory capacity. Such Advisory Board shall meet
at such times and upon such notice as the Trustees may by resolution provide.


<PAGE>



                                   ARTICLE VI

                         OFFICERS, AGENTS AND EMPLOYEES

         SECTION 1. Number and Qualifications. The officers of the Trust shall
be a Chairman of the Board, a President, a Treasurer, a Controller and a
Secretary, each of whom shall be elected by the Board of Trustees. The Board of
Trustees may also appoint any other officers, agents and employees it deems
necessary or proper. Any two (2) or more offices may be held by the same person,
except the office of President, but no officer shall execute, acknowledge or
verify in more than one (1) capacity any instrument required by law to be
executed, acknowledged or verified in more than one capacity. The Chairman of
the Board, the President, the Treasurer, the Controller and the Secretary shall
be elected by the Board of Trustees each year at its first meeting held after
the annual meeting of the Shareholders, each to hold office until the meeting of
the Board following the next annual meeting of the Shareholders and until his or
her successor shall have been duly elected and shall have qualified, or until
his or her death, or until he or she shall have resigned or have been removed,
as provided in these By-Laws. Other elected officers are elected by the
Trustees. Assistant officers may be appointed by the elected officers. Such
other officers and agents shall have such duties and shall hold their offices
for such terms as may be prescribed by the Board or by the appointing authority.
Any officer other than the Chairman of the Board may be but none need be, a
Trustee, and any officer may be, but none need be a Shareholder.

         SECTION 2. Resignations. Any officer of the Trust may resign at any
time by giving written notice of his or her resignation to the Board of
Trustees, the Chairman of the Board, the President or the Secretary. Any
resignation shall take effect at the time specified therein or, if the time when
it shall become effective is not specified therein, immediately upon its
receipt. The acceptance of a resignation shall not be necessary to make it
effective unless otherwise stated in the resignation.

         SECTION 3. Removal of Officer, Agent or Employee. Any officer, agent or
employee of the Trust may be removed by the Board of Trustees with or without
cause at any time, and the Board may delegate the power of removal as to agents
and employees not elected or appointed by the Board of Trustees.

         SECTION 4. Vacancies. A vacancy in any office, whether arising from
death, resignation, removal or any other cause, may be filled for the unexpired
portion of the term of the office that shall be vacant, in the manner prescribed
in these By-Laws for the regular election or appointment to that office.

         SECTION 5. Compensation. The compensation, if any, of the officers of
the Trust shall be fixed by the Board of Trustees, but this power may be
delegated to any officer with respect to other officers under his control.

         SECTION 6. Bonds or Other Security. If required by the Board, any
officer, agent or employee of the Trust shall give a bond or other security for
the faithful performance of his or her duties, in an amount and with any surety
or sureties as the Board may require.

         SECTION 7. Chairman of the Board. The Chairman of the Board shall be a
Trustee of the Trust and, unless the Board shall specify otherwise, shall
preside at meetings of the Board and of the Shareholders.

         SECTION 8. President. The President shall be the Chief Executive
Officer of the Trust and shall have, subject to the control of the Board of
Trustees, general charge of the business and affairs of the Trust, and may
employ and discharge employees and agents of the Trust, except those elected or
appointed by the Board, and he or she may delegate these powers.

         SECTION 9. Vice President. Each Vice President shall have the powers
and perform the duties that the President or the Board of Trustees may from time
to time prescribe. In the absence or disability of the President, the Vice
President or, if there be more than one Vice President, any Vice President
designated by the Trustees, shall perform all the duties and may exercise any of
the powers of the President, subject to the control of the Board of Trustees.

         SECTION 10. Treasurer. The Treasurer shall be the principal financial
and accounting officer of the Trust. He or she shall deliver all funds of the
Trust which may come into his or her hands to such Custodian as the Trustees may
employ pursuant to Article X of these By-Laws. He or she shall render a
statement of condition of the finances of the Trust to the Trustees as often as
they shall require the same, and he or she shall in general perform all the
duties incident to the office of Treasurer and such other duties as from time to
time may be assigned to him or her by the Board of Trustees.

         SECTION 11. Assistant Treasurers. In the absence or disability of the
Treasurer, the Assistant Treasurer, or, if there be more than one, any Assistant
Treasurer designated by the Board of Trustees, shall perform all the duties, and
may exercise all the powers, of the Treasurer. The Assistant Treasurers, if any,
shall perform such other duties as from time to time may be assigned to them by
the Treasurer or the Board of Trustees.

         SECTION 12. Controller and Chief Accounting Officer. The controller
shall be the officer of the Trust primarily responsible for ensuring all
expenditures of the Trust are reasonable and appropriate. The controller shall
be responsible for oversight and maintenance of liquidity and leverage
facilities available to the Trust and shall have such other duties and powers as
may be designated from time to time by the President or the Board.

         The chief accounting officer of the Trust shall be in charge of its
books and accounting records. The chief accounting officer shall be responsible
for preparation of financial statements of the Trust and shall have such other
duties and powers as may be designated from time to time by the President or the
Board.

SECTION 13. Assistant Controllers. In the absence or disability of the
controller, the assistant controller, or, if there be more than one, any
assistant controller designated by the Board of Trustees, shall perform all of
the duties, and may exercise all of the powers, of the controller. The assistant
controllers, if any, shall perform such other duties as from time to time may be
assigned to them by the controller or the Board of Trustees.

         SECTION 14. Secretary. The Secretary shall keep the minutes of all
meetings of the Trustees and of all meetings of the Shareholders in proper books
provided for that purpose; he or she shall have custody of the seal of the
Trust; he or she shall have charge of the share transfer books, lists and
records unless the same are in the charge of the Transfer Agent. He or she shall
attend to the giving and serving of all notices by the Trust in accordance with
the provisions of these By-Laws and as required by law; and subject to these
By-Laws, he or she shall in general perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him or
her by the Trustees.

         SECTION 15. Assistant Secretaries. In the absence or disability of the
Secretary, the Assistant Secretary, or, if there be more than one, any Assistant
Secretary designated by the Board of Trustees, shall perform all of the duties,
and may exercise all of the powers, of the Secretary. The Assistant Secretaries,
if any, shall perform such other duties as from time to time may be assigned to
them by the Secretary or the Board of Trustees.

         SECTION 16. Delegation of Duties. In case of the absence or disability
of any officer of the Trust, or for any other reason that the Board of Trustees
may deem sufficient, the Board may confer for the time being the powers or
duties, or any of them, of such officer upon any other officer or upon any
Trustee.

                                   ARTICLE VII

                                   FISCAL YEAR

         The fiscal year of the Trust shall begin on the 1st day of January in
each year and shall end on the last day of December in each year, provided,
however, that the Trustees may from time to time change the fiscal year.

                                  ARTICLE VIII

                                      SEAL

         The Trustees shall adopt a seal which shall be in such form and shall
have such inscription thereon as the Trustee may from time to time prescribe.


<PAGE>



                                   ARTICLE IX

                                WAIVERS OF NOTICE

         Whenever any notice whatever is required to be given by law, the
Declaration or these By-Laws, a waiver thereof in writing, signed by the person
or persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto. A notice shall be deemed to have
been telegraphed, cabled or wirelessed for the purpose of these By-Laws when it
has been delivered to a representative of any telegraph, cable or wireless
company with instruction that it be telegraphed, cabled or wirelessed.

                                    ARTICLE X

                                    CUSTODIAN

         Section 1. Appointment and Duties. The Trustees shall at all times
employ a bank or trust company having a capital, surplus and undivided profits
of at least five million dollars ($5,000,000) as Custodian with authority as its
agent, but subject to such restrictions, limitations and other requirements, if
any, as may be contained in the Declaration, these By-Laws and the 1940 Act;

         (1) to hold the securities owned by the Trust and deliver the same upon
written order;

         (2) to receive and receipt for any monies due to the Trust and deposit
the same in its own banking department or elsewhere as the Trustees may direct;

         (3) to disburse such funds upon orders or vouchers;

         (4) if authorized by the Trustees, to keep the books and accounts of
the Trust and furnish clerical and accounting services; and

         (5) if authorized to do so by the Trustees, to compute the net income
of the Trust; all upon such basis of compensation as may be agreed upon between
the Trustees and the Custodian. If so directed by a Majority Shareholder Vote,
the Custodian shall deliver and pay over all property of the Trust held by it as
specified in such vote.

         The Trustees may also authorize the Custodian to employ one or more
sub-Custodians from time to time to perform such of the acts and services of the
Custodian and upon such terms and conditions, as may be agreed upon between the
Custodian and such sub-Custodian and approved by the Trustees, provided that in
every case such sub-Custodian shall be a bank or trust company organized under
the laws of the United States or one of the states thereof and having capital,
surplus and undivided profits of at least five million dollars ($5,000,000.00).

         Section 2. Central Certificate System. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may direct the
Custodian to deposit all or any part of the securities owned by the Trust in a
system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, or otherwise in accordance with the 1940
Act, pursuant to which system all securities of any particular class or series
of any issuer deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to withdrawal only
upon the order of the Trust or its Custodian.

         Section 3. Acceptance of Receipts in Lieu of Certificates. Subject to
such rules, regulations and orders as the Commission may adopt, the Trustees may
direct the Custodian to accept written receipts or other written evidence
indicating purchases of securities held in book-entry form in the Federal
Reserve System in accordance with regulations promulgated by the Board of
Governors of the Federal Reserve System and the local Federal Reserve Banks in
lieu of receipt of certificates representing such securities.

         Section 4. Provisions of Custodian Contract. The following provisions
shall apply to the employment of a Custodian pursuant to this Article X and to
any contract entered into with the Custodian so employed.

         (a) The Trustees shall cause to be delivered to the Custodian all
securities owned by the Trust or to which it may become entitled, and shall
order the same to be delivered by the Custodian only upon completion of a sale,
exchange, transfer, pledge, loan of portfolio securities to another person or
other disposition thereof, and upon receipt by the Custodian of the
consideration therefor or a certificate of deposit or a receipt of an issuer or
of its Transfer Agent, all as the Trustees may generally or from time to time
require or approve, or to a successor Custodian; and the Trustees shall cause
all funds owned by the Trust or to which it may become entitled to be paid to
the Custodian, and shall order the same disbursed only for investment against
delivery of the securities acquired, or the return of cash held as collateral
for loans of portfolio securities, or in payment of expenses, including
management compensation, and liabilities of the Trust, including distributions
to Shareholders, or to a successor Custodian; provided, however, that nothing
herein shall prevent delivery of securities for examination to the broker
selling the same in accord with the "street delivery" custom whereby such
securities are delivered to such broker in exchange for a delivery receipt
exchanged for a delivery receipt exchanged on the same day for an uncertified
check of such broker to be presented on the same day for certification.
Notwithstanding anything to the contrary in these By-Laws, upon receipt of
proper instructions, which may be standing instructions, the Custodian may
delivery funds in the following cases. In connection with repurchase agreements,
the Custodian may transmit, prior to receipt on behalf of the Fund of any
securities or other property, funds from the Fund's custodian account to a
special custodian approved by the Trustees of the Fund, which funds shall be
used to pay for securities to be purchased by the Fund subject to the Fund's
obligation to sell and the seller's obligation to repurchase such securities. In
such case, the securities shall be held in the custody of the special custodian.
In connection with the Trust's purchase or sale of financial futures contracts,
the Custodian shall transmit, prior to receipt on behalf of the Fund of any
securities or other property, funds from the Trust's custodian account in order
to furnish to and maintain funds with brokers as margin to guarantee the
performance of the Trust's futures obligations in accordance with the applicable
requirements of commodities exchanges and brokers.

         (b) In case of the resignation, removal or inability to serve of any
such Custodian, the Trust shall promptly appoint another bank or trust company
meeting the requirements of this Article X as successor Custodian. The agreement
with the Custodian shall provide that the retiring Custodian shall, upon receipt
of notice of such appointment, deliver the funds and property of the Trust in
its possession to and only to such successor, and that pending appointment of a
successor Custodian, or a vote of the Shareholders to function without a
Custodian, the Custodian shall not delivery funds and property of the Trust to
the Trust, but may deliver them to a bank or trust company doing business in
Boston, Massachusetts, of its own selection, having an aggregate capital,
surplus and undivided profits (as shown in its last published report) of at
least $5,000,000, as the property of the Trust to be held under terms similar to
those on which they were held by the retiring Custodian.

                                   ARTICLE XI

                          SALES OF SHARES OF THE TRUST

         The Trustees may from time to time issue and sell or cause to be issued
and sold Shares for cash or other property, which shall in every case be paid or
delivered to the Custodian as agent of the Trust before the delivery of any
certificate for such shares. The Shares, including additional Shares which may
have been purchased by the Trust (herein sometimes referred to as "treasury
shares"), may not be sold at less than the net asset value thereof determined by
or on behalf of the trustees as of a time within forty-eight hours, excluding
Sundays and holidays, next preceding the time of such determination, except (1)
in connection with an offering to the holders of Shares; (2) with the consent of
a majority of the holders of Shares; (3) upon conversion of a convertible
security in accordance with its terms; (4) upon the exercise of any warrant
issued in accordance with the provisions of section 18(d) of the 1940 Act; or
(5) under such other circumstances as the Commission may permit by rules and
regulations or orders for the protection of investors.

         No Shares need be offered to existing Shareholders before being offered
to others. No Shares shall be sold by the Trust (although Shares previously
contracted to be sold may be issued upon payment therefor) during any period
when the determination of net asset value is suspended by declaration of the
Trustees. In connection with the acquisition by merger or otherwise of all or
substantially all the assets of an investment company (whether a regulated or
private investment company or a personal holding company), the Trustees may
issue or cause to be issued Shares and accept in payment therefor such assets at
not more than market value in lieu of cash, notwithstanding that the federal
income tax basis to the Trust of any assets so acquired may be less than the
market value, provided that such assets are of the character in which the
Trustees are permitted to invest the funds of the Trust.

                                   ARTICLE XII

                           DIVIDENDS AND DISTRIBUTIONS

         Section 1. Limitations on Distributions. The total of distributions to
Shareholders paid in respect of any one fiscal year, subject to the exceptions
noted below, shall, when and as declared by the Trustees be approximately equal
to the sum of (A) the net income, exclusive of the profits or losses realized
upon the sale of securities or other property, for such fiscal year, determined
in accordance with generally accepted accounting principles (which, if the
trustees so determine, may be adjusted for net amounts included as such accrued
net income in the price of Shares issued or repurchased), but if the net income
exceeds the amount distributed by less than one cent per share outstanding at
the record date for the final dividend, the excess shall be treated as
distributable income of the following year; and (B), in the discretion of the
Trustees, an additional amount which shall not substantially exceed the excess
of profits over losses on sales of securities or other property for such fiscal
year. The decision of the Trustees as to what, in accordance with generally
accepted accounting principles, is income and what is principal shall be final,
and except as specifically provided herein the decision of the Trustees as to
what expenses and charges of the Trust shall be charged against principal and
what against income shall be final, all subject to any applicable provisions of
the 1940 Act and rules, regulations and orders of the Commission promulgated
thereunder. For the purposes of the limitation imposed by this Section 1, Shares
issued pursuant to Section 2 of this Article XII shall be valued at the amount
of cash which the Shareholders would have received if they had elected to
receive cash in lieu of such Shares.

         Inasmuch as the computation of net income and gains for federal income
tax purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give to the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust to avoid or reduce liability for taxes. Any payment made to
Shareholders pursuant to clause (B) of this Section 1 shall be accompanied by a
written statement showing the source or sources of such payment, and the basis
of computation thereof. The Trustees may, in their discretion, elect to retain
the amounts referred to in Clause B of this Section 1 and pay any federal income
taxes thereon.

         Section 2. Distributions Payable in Cash or Shares. The Trustees may
adopt and offer to Shareholders such dividend reinvestment plans, cash dividend
payout plans or related plans as the Trustees shall deem appropriate. The
Trustees shall have power, to the fullest extent permitted by the laws of
Massachusetts but subject to the limitation as to cash distributions imposed by
Section 1 of this Article XII, at any time or from time to time to declare and
cause to be paid distributions payable at the election of any of the
Shareholders (whether exercised before or after the declaration of the
distribution) either in cash orin Shares, provided that the sum of (i) the cash
distribution actually paid to any Shareholder and (ii) the net asset value of
the Shares which that Shareholder elects to receive, in effect at such time as
the Trustees may specify, shall not exceed the full amount of cash to which that
Shareholder would be entitled if he elected to receive only cash. In the case of
a distribution payable in cash or Shares, a Shareholder failing to express his
election before a given time shall be deemed to have elected to take Shares
rather than cash.

         Section 3. Stock Dividends. Anything in these By-Laws to the contrary
notwithstanding, the Trustees may at any time declare and distribute pro rata
among the Shareholders a "stock dividend" out of either authorized but unissued
Shares or treasury Shares or both.

                                   ARTICLE XIV

                                   AMENDMENTS

         These By-Laws, or any of them, may be altered, amended or repealed, or
new By-Laws may be adopted (a) by Majority Shareholder Vote, or (b) by the
Trustees, provided, however, that no By-Law may be amended, adopted or repealed
by the Trustees if such amendment, adoption or repeal requires, pursuant to law,
the Declaration or these By-Laws, a vote of the Shareholders or if such
amendment, adoption or repeal changes or affects the provisions of Sections 1
and 4 of Article X or the provisions of this Article XIII.

                                   ARTICLE XV

                                  MISCELLANEOUS

         The Trust shall not impose any restrictions upon the transfer of the
Shares of the Trust except as provided in the Declaration, but this requirement
shall not prevent the charging of customary transfer agent fees.

         The Trust shall not permit any officer or Trustee of the Trust, or
anypartner, officer or director of the Investment Adviser or underwriter of the
Trust to deal for or on behalf of the Trust with himself as principal or agent,
or with any partnership, association or corporation in which he has a financial
interest; provided that the foregoing provisions shall not prevent (a) officers
and Trustees of the Trust or partners, officers or directors of the Investment
Adviser or underwriter of the Trust from buying, holding or selling shares in
the Trust, or from being partners, officers or directors or otherwise
financially interested in the Investment Adviser or underwriter of the Trust or
any affiliate thereof; (b) purchases or sales of securities or other property by
the Trust from or to an affiliated person or to the Investment Adviser or
underwriters of the Trust if such transaction is exempt from the applicable
provisions of the 1940 Act; (c) purchases of investments for the portfolio of
the Trust or sales of investments owned by the Trust through a security dealer
who is, or one or more of whose partners, shareholders, officers or directors
is, an officer or Trustee of the Trust, or a partner, officer or director of the
Investment Adviser or underwriter of the Trust, if such transactions are handled
in the capacity of broker only and commissions charged do not exceed customary
brokerage charges for such services; (d) employment of legal counsel, registrar,
Transfer Agent, dividend disbursing agent or Custodian who is, or has a partner,
shareholder, officer, or director who is, an officer or Trustee of the Trust, or
a partner, officer or director of the Investment Adviser or underwriter of the
Trust, if only customary fees are charged for services to the Trust; (e) sharing
statistical research, legal and management expenses and office hire and expenses
with any other investment company in which an officer or Trustee of the Trust,
or a partner, officer or director of the Investment Adviser or underwriter of
the Trust, is an officer or director or otherwise financially interested.

                                 END OF BY-LAWS




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>12
<FILENAME>poas.txt
<DESCRIPTION>POWER OF ATTORNEYS
<TEXT>
                         POWER OF ATTORNEY FOR SIGNATURE



The undersigned constitutes William J. Ballou, Jeremiah J. Bresnahan, J. Kevin
Connaughton, Tracy S. DiRienzo, Ellen Harrington, Kevin S. Jacobs, Russell L.
Kane, Robert R. Leveille and Vincent P. Pietropaolo, individually, as my true
and lawful attorney, with full power to each of them to sign for me and in my
name, any and all registration statements and any and all amendments to the
registration statements filed under the Securities Act of 1933 or the Investment
Company Act of 1940 with the Securities and Exchange Commission for the purpose
of complying with such registration requirements in my capacity as a
trustee/director or officer of Liberty All-Star Equity Fund and Liberty All-Star
Growth, Inc. (All-Star Funds). This Power of Attorney authorizes the above
individuals to sign my name and will remain in full force and effect until
specifically rescinded by me.

I specifically permit this Power of Attorney to be filed, as an exhibit to a
registration statement or amendment to a registration statement of the All-Star
Funds, with the Securities and Exchange Commission and I request that this Power
of Attorney then constitutes authority to sign additional amendments and
registration statements by virtue of its incorporation by reference into the
registration statements and amendments for the All-Star Funds.

In witness, I have signed this Power of Attorney on this 10th day of October,
2001.




                                                /S/ROBERT J. BIRNBAUM
                                                --------------------------------
                                                   Robert J. Birnbaum




<PAGE>



                         POWER OF ATTORNEY FOR SIGNATURE



The undersigned constitutes William J. Ballou, Jeremiah J. Bresnahan, J. Kevin
Connaughton, Tracy S. DiRienzo, Ellen Harrington, Kevin S. Jacobs, Russell L.
Kane, Robert R. Leveille and Vincent P. Pietropaolo, individually, as my true
and lawful attorney, with full power to each of them to sign for me and in my
name, any and all registration statements and any and all amendments to the
registration statements filed under the Securities Act of 1933 or the Investment
Company Act of 1940 with the Securities and Exchange Commission for the purpose
of complying with such registration requirements in my capacity as a
trustee/director or officer of Liberty All-Star Equity Fund and Liberty All-Star
Growth, Inc. (All-Star Funds). This Power of Attorney authorizes the above
individuals to sign my name and will remain in full force and effect until
specifically rescinded by me.

I specifically permit this Power of Attorney to be filed, as an exhibit to a
registration statement or amendment to a registration statement of the All-Star
Funds, with the Securities and Exchange Commission and I request that this Power
of Attorney then constitutes authority to sign additional amendments and
registration statements by virtue of its incorporation by reference into the
registration statements and amendments for the All-Star Funds.

In witness, I have signed this Power of Attorney on this 10th day of October,
2001.




                                                /S/RICHARD W. LOWRY
                                                --------------------------------
                                                   Richard W. Lowry




<PAGE>



                         POWER OF ATTORNEY FOR SIGNATURE



The undersigned constitutes William J. Ballou, Jeremiah J. Bresnahan, J. Kevin
Connaughton, Tracy S. DiRienzo, Ellen Harrington, Kevin S. Jacobs, Russell L.
Kane, Robert R. Leveille and Vincent P. Pietropaolo, individually, as my true
and lawful attorney, with full power to each of them to sign for me and in my
name, any and all registration statements and any and all amendments to the
registration statements filed under the Securities Act of 1933 or the Investment
Company Act of 1940 with the Securities and Exchange Commission for the purpose
of complying with such registration requirements in my capacity as a
trustee/director or officer of Liberty All-Star Equity Fund and Liberty All-Star
Growth, Inc. (All-Star Funds). This Power of Attorney authorizes the above
individuals to sign my name and will remain in full force and effect until
specifically rescinded by me.

I specifically permit this Power of Attorney to be filed, as an exhibit to a
registration statement or amendment to a registration statement of the All-Star
Funds, with the Securities and Exchange Commission and I request that this Power
of Attorney then constitutes authority to sign additional amendments and
registration statements by virtue of its incorporation by reference into the
registration statements and amendments for the All-Star Funds.

In witness, I have signed this Power of Attorney on this 10th day of October,
2001.





                                                /S/JAMES E. GRINNELL
                                                --------------------------------
                                                   James E. Grinnell




<PAGE>



                         POWER OF ATTORNEY FOR SIGNATURE



The undersigned constitutes William J. Ballou, Jeremiah J. Bresnahan, J. Kevin
Connaughton, Tracy S. DiRienzo, Ellen Harrington, Kevin S. Jacobs, Russell L.
Kane, Robert R. Leveille and Vincent P. Pietropaolo, individually, as my true
and lawful attorney, with full power to each of them to sign for me and in my
name, any and all registration statements and any and all amendments to the
registration statements filed under the Securities Act of 1933 or the Investment
Company Act of 1940 with the Securities and Exchange Commission for the purpose
of complying with such registration requirements in my capacity as a
trustee/director or officer of Liberty All-Star Equity Fund and Liberty All-Star
Growth, Inc. (All-Star Funds). This Power of Attorney authorizes the above
individuals to sign my name and will remain in full force and effect until
specifically rescinded by me.

I specifically permit this Power of Attorney to be filed, as an exhibit to a
registration statement or amendment to a registration statement of the All-Star
Funds, with the Securities and Exchange Commission and I request that this Power
of Attorney then constitutes authority to sign additional amendments and
registration statements by virtue of its incorporation by reference into the
registration statements and amendments for the All-Star Funds.

In witness, I have signed this Power of Attorney on this 10th day of October,
2001.





                                                /S/WILLIAM E. MAYER
                                                --------------------------------
                                                   William E. Mayer





<PAGE>



                         POWER OF ATTORNEY FOR SIGNATURE



The undersigned constitutes William J. Ballou, Jeremiah J. Bresnahan, J. Kevin
Connaughton, Tracy S. DiRienzo, Ellen Harrington, Kevin S. Jacobs, Russell L.
Kane, Robert R. Leveille and Vincent P. Pietropaolo, individually, as my true
and lawful attorney, with full power to each of them to sign for me and in my
name, any and all registration statements and any and all amendments to the
registration statements filed under the Securities Act of 1933 or the Investment
Company Act of 1940 with the Securities and Exchange Commission for the purpose
of complying with such registration requirements in my capacity as a
trustee/director or officer of Liberty All-Star Equity Fund and Liberty All-Star
Growth, Inc. (All-Star Funds). This Power of Attorney authorizes the above
individuals to sign my name and will remain in full force and effect until
specifically rescinded by me.

I specifically permit this Power of Attorney to be filed, as an exhibit to a
registration statement or amendment to a registration statement of the All-Star
Funds, with the Securities and Exchange Commission and I request that this Power
of Attorney then constitutes authority to sign additional amendments and
registration statements by virtue of its incorporation by reference into the
registration statements and amendments for the All-Star Funds.

In witness, I have signed this Power of Attorney on this 10th day of October,
2001.





                                                /S/JOHN J. NEUHAUSER
                                                --------------------------------
                                                   John J. Neuhauser



</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
