<DOCUMENT>
<TYPE>EX-99.2G
<SEQUENCE>6
<FILENAME>exhibit2g5.txt
<DESCRIPTION>EX-99.2G5
<TEXT>
                          LIBERTY ALL-STAR EQUITY FUND
                         PORTFOLIO MANAGEMENT AGREEMENT
                           MATRIX ASSET ADVISERS, INC.


                               December 18, 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 Matrix Asset Advisers,  Inc.  ("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

<PAGE>

            the  investment  and  reinvestment of the assets  in  the  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
   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

<PAGE>

   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 other


<PAGE>


   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) on the cover page of each Form 13F that
   the Portfolio Manager files with the  Securities and Exchange Commission (the
   "SEC"), check the "13F Combination Report"  box  and  on the Form 13F Summary
   Page  identify  "ALPS  Advisers,  Inc."  as  another manager  for  which  the
   Portfolio Manager is filing the Form 13F report;  (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

<PAGE>


   Section 13(f) in a material  respect,  or  receives a comment letter from the
   SEC raising a question with respect to compliance.

     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:

MATRIX ASSET ADVISERS, INC.

By: /s/ Douglas Altabef
    -------------------
Name: Douglas Altabef
Title: Sr. Managing Director


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


Matrix Asset Advisors, Inc.
Attn:  Legal Department
747 Third Avenue, 31st Floor
New York, NY  10017

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

Dear Matrix:


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 Matrix Asset Advisors, Inc., 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.


Enclosures


<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>
