<DOCUMENT>
<TYPE>EX-99.2G
<SEQUENCE>2
<FILENAME>exhibit2g1.txt
<DESCRIPTION>EX-99.2G1
<TEXT>
                          LIBERTY ALL-STAR EQUITY FUND
                            FUND MANAGEMENT AGREEMENT

FUND  MANAGEMENT  AGREEMENT dated December 18, 2006,  between  Liberty  All-Star
Equity Fund, a business trust  organized  under the laws of the  Commonwealth of
Massachusetts (the "Trust"),  and ALPS Advisers,  Inc., a corporation  organized
under the laws of the State of Colorado ("Manager").

WHEREAS the Trust will operate as a  closed-end  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 and By-Laws, as amended from time to time, and its registration  statement
on Form N-2 under the Investment Company Act and the Securities Act of 1933 (the
"Registration Statement"),  all as heretofore amended and supplemented;  and the
Trust 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 (the  "Advisers  Act"),  and desires to provide
services  to the  Trust in  consideration  of and on the  terms  and  conditions
hereinafter set forth;

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

1.     EMPLOYMENT OF THE MANAGER. The Trust hereby employs the Manager to manage
the investment and reinvestment of the Trust's assets in the manner 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 Board of Trustees
and the officers of the Trust, 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
Trust in any way or otherwise be deemed an agent of the Trust.

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.     Investment Management Services.

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

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

(3)    The Trust  and the  Manager  intend 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 Trust's  assets
       assigned to that Portfolio Manager and the purchase and sale of portfolio
       securities  with  those  assets,   all  within  the  Trust's   investment
       objectives, policies and restrictions, and the Trust 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 Trust.  The Manager  shall  advise the Trustees of the Trust which
       Portfolio  Managers  the Manager  believes  are best suited to invest the
       assets  of  the  Trust;   shall  monitor  and  evaluate  the   investment
<PAGE>
       performance  of each  Portfolio  Manager  employed  by the  Trust;  shall
       allocate and  reallocate  the portion of the Trust's assets to be managed
       by each  Portfolio  Manager;  shall  recommend  changes of or  additional
       Portfolio  Managers  when  deemed  appropriate  by  the  Manager;   shall
       coordinate  and  monitor  the  investment  activities  of  the  Portfolio
       Managers to ensure  compliance  with the Trust's  investment  objectives,
       policies and restrictions  and applicable laws,  including the Investment
       Company Act and the Internal Revenue Code of 1986, as amended; shall have
       full investment discretion to make all determinations with respect to the
       investment of the Trust's assets not then managed by a Portfolio Manager;
       and shall  implement  procedures  reasonably  designed to ensure that the
       Portfolio  Managers  comply  with  the  Trust's  investment   objectives,
       policies and restrictions.

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

(5)    The  Manager  shall  comply - and to the extent the  Manager  takes or is
       required to take action on behalf of the Trust  hereunder shall cause the
       Trust to  comply - with all  applicable  requirements  of the  Investment
       Company Act and other applicable  laws,  rules,  regulations,  orders and
       codes  of  ethics,  as  well  as  all  investment  objectives,  policies,
       restrictions  and  procedures  adopted  by  the  Trust  and  the  Trust's
       registration statement on Form N-2, Declaration of Trust and By-laws.

B.     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 Trust in the
preparation of registration statements,  reports and other documents required by
Federal and state securities  laws, and such other  information as the Trust may
reasonably  request for use in the  preparation  of such  documents  or of other
materials necessary or helpful for the distribution of the Trust's shares.

C.     Other Obligations and Services.

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

(2)    The  Manager  will  adopt a  written  code of ethics  complying  with the
       requirements  of Rule  204A-1  under the  Advisers  Act and of Rule 17j-1
       under the Investment  Company Act, and will provide the Trust 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,  or at any other time  required  by the Board of
       Trustees,  the  President  or a Vice  President  or other  officer of the
       Manager shall certify to the Trust 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 Trust,  the  Manager  shall
       permit the Trust,  its  employees  or its agents to examine  the  reports
       required to be made by the Manager by Rule 17j-1(c)(2)(ii).

(3)    The  Manager  will  maintain  and  implement   compliance   policies  and
       procedures  that are reasonably  designed to ensure its  compliance  with
       Rule  206(4)-7  of the  Advisers  Act and to  prevent  violations  of the
       Federal  Securities  Laws (as defined in Rule 38a-1 under the  Investment
       Company Act). The Manager also will provide the Trust's Chief  Compliance
       Officer with periodic reports regarding the Manager's compliance with the
       Federal  Securities  Laws  and  the  Manager's  compliance  policies  and
       procedures,  which may include,  from time to time, a copy and/or summary
       of such compliance  policies and  procedures,  and a report of the annual
       review  determining the  effectiveness  of such  compliance  policies and
       procedures.

(4)    The  Manager  (or  upon  written  request  of the  Manager,  one or  more
       Portfolio Managers) will vote all proxies solicited by or with respect to

                                       2
<PAGE>

       the issuers of  securities  in which  assets of the Trust may be invested
       from time to time in accordance with such policies as shall be determined
       by the Manager, and reviewed and approved by the Board of Trustees.

3.     EXECUTION   AND  ALLOCATION  OF  PORTFOLIO  BROKERAGE  COMMISSIONS.   The
Portfolio  Managers,  subject to and in accordance with any directions the Trust
may  issue  from time to time, shall place, in the name of the Trust, orders for
the  execution  of the Trust's portfolio transactions. When placing such orders,
the obligation of each Portfolio Manager shall be as provided in the  applicable
Portfolio Management Agreement. The Manager will oversee the placement of orders
by Portfolio Managers in accordance with their respective  Portfolio  Management
Agreements and will render regular  reports to the Trust of the total  brokerage
business placed on behalf of the Trust by the Portfolio  Managers and the manner
in which such brokerage business has been allocated.

The Trust hereby  agrees that any entity or person  associated  with the Manager
that is a member of a national  securities  exchange is authorized to effect any
transaction  on such  exchange for the account of the Trust to the extent and as
permitted by Section  11(a)(1)(H)  of the  Securities  Exchange Act of 1934,  as
amended ("1934 Act").

Subject to the  appropriate  policies  and  procedures  approved by the Board of
Trustees, the Manager may, to the extent authorized by Section 28(e) of the 1934
Act,  cause  the  Trust to pay a broker or dealer  that  provides  brokerage  or
research  services to the Manager,  the Portfolio Manager or the Trust an amount
of  commission  for  effecting  a Trust  transaction  in excess of the amount of
commission  another  broker or dealer  would have  charged  for  effecting  that
transaction  if the  Manager  determines,  in good  faith,  that such  amount of
commission  is  reasonable  in  relationship  to the value of such  brokerage or
research  services  provided  in terms  of that  particular  transaction  or the
Manager's overall responsibilities to the Trust or its other investment advisory
clients.  To the  extent  authorized  by said  Section  28(e)  and the  Board of
Trustees,  the Manager  shall not be deemed to have acted  unlawfully or to have
breached  any duty created by this  Agreement  or otherwise  solely by reason of
such action.

4.     EXPENSES OF THE TRUST.  It is understood  that the Trust will pay all its
       expenses  other  than  those  expressly  assumed  by the  Manager,  which
       expenses payable by the Trust shall include:

A.     Fees of the Manager;

B.     Expenses of all audits by independent public accountants;

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

D.     Expenses of custodial services;

E.     Expenses of obtaining quotations for calculating the value of the Trust'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 Trust 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 Trust;

I.     Expenses  associated with any offering  (subject to any written agreement
       by the Manager or an affiliate of the Manager to reimburse any portion of
       such expenses);

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

                                       3
<PAGE>
K.     Costs  and/or fees  incident to Trustee and  shareholder  meetings of the
       Trust,  the preparation and mailings of proxy material,  prospectuses and
       reports of the Trust to its  shareholders,  the  filing of  reports  with
       regulatory  bodies,  the  maintenance  of the  Trust's  legal  existence,
       membership   dues  and  fees  of  investment   company   industry   trade
       associations,  the  listing  (and  maintenance  of such  listing)  of the
       Trust'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 Trust's
       shares for sale;

M.     Costs of printing stock certificates representing shares of the Trust, if
       any;

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

O.     Fees for the fidelity bond  required by Section  17(g) of the  Investment
       Company Act, or other insurance premiums; and

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

Q.     Nonrecurring and extraordinary expenses, such as indemnification payments
       or damages awarded in litigation or settlements made.

5.     ACTIVITIES AND AFFILIATES OF THE MANAGER.

A.     The services of the Manager to the Trust  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  Trust'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 Trust 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 Trust and to Section  10(a) of the  Investment  Company Act, it is
       understood that Trustees,  officers, agents and shareholders of the Trust
       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 Trust as Trustees,  officers,
       agents, shareholders or otherwise; that the Manager or its affiliates may
       be interested  in the Trust 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 Manager and Portfolio Managers.  The
compensation  of the  Manager for its  services  under this  Agreement  shall be
calculated and paid by the Trust in accordance with the attached  Exhibit A. The
Manager will  compensate  the  Portfolio  Managers as provided in the  Portfolio
Management Agreement entered into with the Portfolio Managers from time to time.

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 Trust or to
       any shareholder of the Trust 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 Trust,  or the Manager,  from liability in violation of
       Sections 17(h) and (i) of the Investment Company Act.

                                       4
<PAGE>

8.     RENEWAL AND TERMINATION.

A.     This  Agreement  shall  continue in effect for two years from the date of
       this Agreement and shall continue from year to year  thereafter  provided
       such  continuance is  specifically  approved at least annually by (i) the
       Trust's Board of Trustees or (ii) a vote of a majority of the outstanding
       voting  securities  of the Trust (as  defined in the  Investment  Company
       Act), 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
       ("Independent  Trustees"), 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  Trust,  including  a  majority  of the
       Independent  Trustees, or by vote of a majority of the outstanding voting
       securities  of the  Trust,  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 Trust.

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 Trust, 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 Board of Trustees
under said  Declaration  of Trust,  and not to the Trustees  personally,  and no
Trustee,  shareholder,  officer, agent or employee of the Trust shall be held to
any personal liability hereunder or in connection with the affairs of the Trust,
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  Trust  or of any
successor  of the Trust,  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 Trust.

10.    USE OF NAME.  The Trust may use the name  "Liberty All-Star," "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 Trust (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" or "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 adviser.

11.    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.

                                       5
<PAGE>

12.    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.

13.    INTERPRETATION.  Nothing herein contained  shall be deemed to require the
Trust to take any action contrary to this Agreement and its Declaration of Trust
or By-Laws, or any applicable  statutory or regulatory  requirements to which it
is subject or by which it is bound,  or to relieve or deprive  the  Trustees  of
their responsibility for and control of the conduct of the affairs of the Trust.

14.    ENTIRE  AGREEMENT. This  Agreement contains the entire understanding  and
agreement of the parties.

15.    HEADINGS. The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.

16.    FORCE  MAJEURE.  The Manager shall  not be  liable  for  delays or errors
occurring  by reason of  circumstances  beyond its  control,  including  but not
limited  to acts of civil or  military  authority,  national  emergencies,  work
stoppages,  fire, flood, catastrophe,  acts of God, insurrection,  war, riot, or
failure of communication or power supply.  In the event of equipment  breakdowns
beyond its control,  the Manager shall take reasonable steps to minimize service
interruptions but shall have no liability with respect thereto.

17.    RECORDS.  The  records  relating  to  the  services  provided  under this
Agreement  shall  be the  property  of the Trust and shall be under its control;
however,  the  Trust shall  furnish to the Manager such records and permit it to
retain  such  records  (either  in  original or in  duplicate  form) as it shall
reasonably  require  in  order  to  carry  out  its duties.  In the event of the
termination  of  this  Agreement, such records shall promptly be returned to the
Trust  by  the  Manager free  from  any  claim  or retention of rights  therein,
provided  that the  Manager  may  retain  copies  of any  such  records that are
required  by law.  The Manager shall keep confidential any information  obtained
in  connection  with its duties  hereunder and disclose such information only if
the  Trust has  authorized  such  disclosure  or if such disclosure is expressly
required  or  lawfully  requested  by applicable  Federal  or  state  regulatory
authorities.

                                       6
<PAGE>

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

                                             LIBERTY ALL-STAR EQUITY FUND


                                             By: /s/ William J. Parmentier, Jr.
                                             Name: William J. Parmentier, Jr.
                                             Title: President


                                             ALPS ADVISERS, INC.



                                             By: /s/ Edmund J. Burke
                                             Name: Edmund J. Burke
                                             Title: President

                                       7
<PAGE>

                                    EXHIBIT A
                                   MANAGER FEE


For the investment management services provided to the Trust pursuant to Section
2(A) of this Agreement, the Trust will pay to the Manager, on or before the 10th
day of each  calendar  month,  a fee  calculated  and accrued  daily and payable
monthly by the Fund for the previous calendar month at the annual rate of: 0.80%
of the first $400 million of average  daily net assets;  0.72% of average  daily
net assets  exceeding $400 million up to and including  $800 million;  0.648% of
average  daily net  assets  exceeding  $800  million  up to and  including  $1.2
billion; and 0.584% of average daily net assets exceeding $1.2 billion.

Pursuant to Section 6 of this Agreement,  the Manager will pay to each Portfolio
Manager,  on or before the 10th day of each calendar month, a fee calculated and
accrued daily and payable monthly by the Manager for the previous calendar month
at the annual rate 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;  and  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 daily net asset values of the portion of the portfolio assets of the
Trust assigned to that Portfolio Manager during the preceding  calendar month by
(ii) the Average Total Fund Net Assets.

"Average  Total Fund Net Assets" means the average daily net asset values of the
Trust as a whole during the preceding calendar month.

The fees  shall be pro rated for any month  during  which this  Agreement  is in
effect for only a portion of the month.
</TEXT>
</DOCUMENT>
