<DOCUMENT>
<TYPE>EX-99.2G
<SEQUENCE>3
<FILENAME>exhibit2g2.txt
<DESCRIPTION>EX-99.2G2
<TEXT>

                          LIBERTY ALL-STAR EQUITY FUND
                         PORTFOLIO MANAGEMENT AGREEMENT
                        PZENA INVESTMENT MANAGEMENT, LLC


                                December 14, 2006


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,  as
amended (the  "Act"),  and is subject to the rules and  regulations  promulgated
thereunder.

     ALPS Advisers, Inc. (the "Fund Manager") evaluates and recommends portfolio
managers for the assets of the Fund, and the Fund Manager or an affiliate of the
Fund Manager is responsible for the day-to-day Fund administration of the Fund.

     1.  EMPLOYMENT AS A PORTFOLIO  MANAGER.  The Fund,  being duly  authorized,
hereby  employs Pzena  Investment  Management,  LLC  ("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.  The  Portfolio  Manager will be an  independent
contractor  and will have no authority  to act for or represent  the Fund or the
Fund Manager in any way or otherwise be deemed to be an agent of the Fund or the
Fund Manager  except as  expressly  authorized  in this  Agreement or in another
writing by the Fund Manager and the Portfolio Manager.  The Portfolio  Manager's
responsibilities  for providing portfolio  management services to the Fund shall
be limited to the Portfolio Manager Account.

     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.
        ---------------------------------------------------

   A. In  providing  portfolio  management  services  to the  Portfolio  Manager
Account,  the Portfolio  Manager shall be subject to the Fund's  Declaration  of
Trust and By-Laws, as amended from time to time, investment objectives, policies
and  restrictions  of the Fund as set forth in its  Prospectus  and Statement of
Additional Information, as the same may be modified from time to time (together,
the "Prospectus"),  the investment objectives,  policies and restrictions of the
Fund  as  determined  from  time  to  time by the  Board  of  Trustees,  and the
investment  and  other  restrictions  set  forth  in the Act and the  rules  and
regulations thereunder,  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  that would cause the Portfolio  Manager Account,  treated as a
separate  fund,  to be out  of  compliance  with  any of  such  restrictions  or
policies.  The  Portfolio  Manager  shall not consult  with any other  portfolio
manager of the Fund concerning  transactions for the Fund in securities or other
assets.

   B. As part of the services it will provide  hereunder,  the Portfolio Manager
will:

         (i)   formulate and implement a continuous  investment  program for the
               Portfolio Manager Account;

         (ii)  take whatever  steps are  necessary to implement  the  investment
               program for the  Portfolio  Manager  Account by arranging for the
               purchase and sale of securities and other investments;

         (iii) keep the Fund Manager and the Board of Trustees of the Fund fully
               informed  in writing on an ongoing  basis,  as agreed by the Fund
               Manager  and  the  Portfolio  Manager,   of  all  material  facts
               concerning the investment and  reinvestment  of the assets in the
<PAGE>

               Portfolio  Manager  Account,  the  Portfolio  Manager and its key
               investment  personnel and  operations;  make regular and periodic
               special written reports of such additional information concerning
               the same as may  reasonably be requested from time to time by the
               Fund Manager or the Trustees of the Fund;  attend  meetings  with
               the Fund Manager and/or  Trustees,  as reasonably  requested,  to
               discuss the  foregoing and such other matters as may be requested
               by the Fund Manager or Trustees;

         (iv)  in accordance  with  procedures  and methods  established  by the
               Trustees  of the Fund,  which may be  amended  from time to time,
               provide   assistance  in  determining   the  fair  value  of  all
               securities and other  investments/assets in the Portfolio Manager
               Account, as necessary,  and use reasonable efforts to arrange for
               the  provision  of  valuation  information  or a price(s)  from a
               party(ies) independent of the Portfolio Manager for each security
               or other  investment/asset  in the Portfolio  Manager Account for
               which market prices are not readily available; and

         (v)   cooperate  with and  provide  reasonable  assistance  to the Fund
               Manager, the Fund's administrator,  custodian, transfer agent and
               pricing  agents and all other agents and  representatives  of the
               Fund and the Fund Manager;  keep all such persons fully  informed
               as to such matters as they may  reasonably  deem necessary to the
               performance  of  their  obligations  to the  Fund  and  the  Fund
               Manager;  provide prompt responses to reasonable requests made by
               such persons;  and maintain any appropriate  interfaces with each
               so as to promote the efficient exchange of information.

     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

 <PAGE>

     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 Fund 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,  and reviewed and approved by the Board
of Trustees. Upon the written request of the Fund Manager, 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, and reviewed and approved by the Board of Trustees.

     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 reasonably 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, the Fund
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 Prospectus as effective from time to time and such

<PAGE>

     other documents  governing the investment of the Portfolio  Manager 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, as amended  ("Advisers  Act") and will continue to be
     so registered for as long as this Agreement remains in effect.

          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  and
     regulations thereunder, the records required to be so kept by an investment
     adviser of the Fund in accordance with applicable  law,  including  without
     limitation  those  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 has  adopted  a  written  code of  ethics  complying  with  the
     requirements of Rule 204A-1 under the Advisers Act and Rule 17j-1 under the
     Act and will provide the Fund Manager and the Board of Trustees with a copy
     of its code of ethics and evidence of its  adoption.  Within 45 days of the
     end of each year while this  Agreement  is in effect,  or at any other time
     requested by the Fund Manager,  an officer,  director 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 and Rule 204A-1 during the
     previous year and that there has been no material  violation of its code of
     ethics or, if such a violation has occurred,  that  appropriate  action was
     taken in  response  to such  violation.  It will  promptly  notify the Fund
     Manager of any material change to its code of ethics or material  violation
     of its code of ethics.

          D. Upon request,  the Portfolio  Manager will promptly supply the Fund
     with any information concerning the Portfolio Manager and its stockholders,
     partners,  employees and affiliates that the Fund may reasonably request in
     connection with the preparation of its  registration  statement (as amended
     from time to time),  prospectus and statement of additional information (as
     supplemented and modified from time to time),  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 Board of Trustees  under
     said Declaration of Trust, as Trustees and not to the Trustees  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,  agents 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.

          F.  The Portfolio  Manager  shall  maintain and  implement  compliance
     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 Act).

          G.  The Portfolio Manager will:  (i) file Form 13F with the Securities
     and Exchange Commission (the "SEC"), on behalf of itself and ALPS Advisers,
     Inc.; (ii) within 60 days after the end of each calendar year,  provide the
     Fund Manager with a certification that the Portfolio Manager's Form 13F was
     filed with the SEC on a timely  basis and  included  all of the  securities
     required to be reported by the SEC;  (iii)  within 60 days after the end of
     each calendar year, provide to the Fund Manager a copy of each Form 13F, or
     amendment  to a Form 13F filed by it during  the prior four  quarters;  and
     (iv) promptly  notify the Fund Manager in the event the  Portfolio  Manager
     determines  that it has failed to comply with  Section  13(f) in a material
     respect,  or receives a comment letter from the SEC raising a question with
     respect to compliance.

<PAGE>

          H.  The Portfolio Manager has adopted written compliance  policies and
     procedures  reasonably  designed to prevent  violations of the Advisers Act
     and the rules  promulgated  thereunder and the Portfolio  Manager agrees to
     provide:  (a) from time to time, a copy and/or  summary of such  compliance
     policies and procedures and an accompanying  certification  certifying that
     the Portfolio Manager's  compliance policies and procedures comply with the
     Advisers  Act; (b) a report of the annual review  determining  the adequacy
     and  effectiveness  of the  Portfolio  Manager's  compliance  policies  and
     procedures;  and (c) the name of the Portfolio  Manager's Chief  Compliance
     Officer to act as a liaison for  compliance  matters that may arise between
     the Fund and the Portfolio Manager.

          I.  The Portfolio Manager will notify the Fund and the Fund Manager of
     any  assignment  of this  Agreement  or change of control of the  Portfolio
     Manager, as applicable, and any changes in the key personnel who are either
     the  portfolio  manager(s)  of the  Portfolio  Manager  Account  or  senior
     management  of the  Portfolio  Manager,  in each case prior to or  promptly
     after,  such change.  The Portfolio  Manager  agrees to bear all reasonable
     expenses of the Fund,  if any,  arising out of an  assignment  or change in
     control.

          J.  The Portfolio Manager agrees to maintain an  appropriate  level of
     errors and omissions or professional liability insurance coverage.

          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, B and C, 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, the rules thereunder or exemptive relief granted
by the SEC,  provided that  Schedules A and B may be amended by the Fund Manager
without the written agreement of the Fund or the Portfolio Manager.

          15. EFFECTIVE DATE; TERM. This Agreement shall become effective on the
date first above  written,  provided that this  Agreement  shall not take effect
unless it has first been  approved:  (1) by a vote of a majority of the Trustees
who are not  "interested  persons"  (as defined in the Act) of any party to this
Agreement ("Independent  Trustees"),  cast in person at a meeting called for the
purpose  of  voting on such  approval,  and (ii) by vote of "a  majority  of the
outstanding  voting  securities"  (as  defined  in the  Act) of the  Fund.  This
Agreement  shall continue for two years from the date of this Agreement 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
of the outstanding voting securities of the Fund,  provided that in either event
such continuance is also approved by a majority of the Independent  Trustees, by
vote  cast in  person  at a meeting  called  for the  purpose  of voting on such
approval.  If the SEC  issues an order to the Fund and the Fund  Manager  for an
exemption  from  Section  15(a)  of  the  Act,  then,  in  accordance  with  the
application of the Fund and the Fund Manager,  the continuance of this Agreement
after initial  approval by the Trustees as set forth above,  shall be subject to
approval by a majority of the outstanding  voting  securities of the Fund at the
regularly scheduled annual meeting of the Fund's shareholders next following the
date of this Agreement.

          16.  TERMINATION.  This Agreement may be terminated at any time 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;  COUNTERPARTS.  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. This Agreement may be
executed in  counterparts,  each of which will be deemed an original  and all of
which together will be deemed to be one and the same agreement.

<PAGE>

          19. USE OF NAME. The Portfolio  Manager agrees and  acknowledges  that
the Fund Manager is the sole owner of the names and marks "Liberty All-Star" and
"All-Star", and that all use of any designation comprised in whole or in part of
these names and marks shall inure to the benefit of the Fund Manager.  Except as
used to identify the Fund to third parties as a client, the use by the Portfolio
Manager on its own behalf of such marks in any advertisement or sales literature
or other  materials  promoting  the  Portfolio  Manager  shall be with the prior
written consent of the Fund Manager.  The Portfolio  Manager shall not,  without
the consent of the Fund Manager, make representations  regarding the Fund or the
Fund Manager in any disclosure  document,  advertisement  or sales literature or
other  materials  promoting the Portfolio  Manager.  Consent by the Fund Manager
shall not be unreasonably  withheld.  Upon termination of this Agreement for any
reason, the Portfolio Manager shall cease any and all use of these marks as soon
as reasonably practicable.


                                 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

ACCEPTED:

PZENA INVESTMENT MANAGEMENT, LLC

By: /s/ William L. Lipsey
    ---------------------
Name: William L. Lipsey
Title: Managing Principal


SCHEDULES:
A. Operational Procedures

B. Records To Be Maintained By The Portfolio Manager

C. Portfolio Manager Fee

<PAGE>

                          LIBERTY ALL-STAR GROWTH 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 Fund Manager;

             (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>

                          LIBERTY ALL-STAR GROWTH FUND
                         PORTFOLIO MANAGEMENT AGREEMENT
                                   SCHEDULE C

                              PORTFOLIO MANAGER FEE

     For services  provided to the Portfolio  Manager Account,  the Fund Manager
will pay to the  Portfolio  Manager,  on or before the 10th day of each calendar
month,  a fee  calculated  and  accrued  daily and  payable  monthly by the Fund
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;  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 Portfolio  Manager  Account 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 Fund as a whole 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.

<PAGE>

April 2, 2007


Pzena Investment Management, LLC
Attn:  Legal Department
120 West 45th Street, 20th Floor
New York, NY  10036

RE:  Portfolio Management Agreement with Liberty All-Star Equity Fund

Dear Pzena:


In a recent audit of the Liberty All-Star Equity Fund (the "Fund") records, it
was discovered that Appendix B and C to the Portfolio Management Agreement
between Pzena Investment Management, LLC, ALPS Advisers, Inc., and the Fund was
mislabeled as Liberty All-Star Growth Fund, Inc.

Therefore, please accept the attached replacement pages with the correct
heading. The body of the pages did not change.

Additionally, please note that ALPS Advisers, Inc., and the Funds main address
has changed from 1625 Broadway, Suite 2200, Denver CO 80202 to 1290 Broadway,
Suite 1100, Denver, CO 80203.

Should you have any questions regarding these matters, please feel free to
contact me or my paralegal Stephanie Barres at 303.623.2577.

Sincerely,


/s/ Tane T. Tyler
-----------------
Tane T. Tyler
Chief Legal Officer
ALPS Advisers, Inc.

<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 Fund Manager;

               (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>

                          LIBERTY ALL-STAR EQUITY FUND
                         PORTFOLIO MANAGEMENT AGREEMENT
                                   SCHEDULE C

                              PORTFOLIO MANAGER FEE

     For services  provided to the Portfolio  Manager Account,  the Fund Manager
will pay to the  Portfolio  Manager,  on or before the 10th day of each calendar
month,  a fee  calculated  and  accrued  daily and  payable  monthly by the Fund
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;  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 Portfolio  Manager  Account 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 Fund as a whole 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>
