LIBERTY ALL STAR EQUITY FUND
PRE 14A, 2000-02-04
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<PAGE>
                                SCHEDULE 14A
                               (Rule 14a-101)

                     INFORMATION REQUIRED IN PROXY STATEMENT

                             SCHEDULE 14A INFORMATION
                     Proxy Statement Pursuant to Section
                 14(a) of the Securities Exchange Act of 1934


Filed by the Registrant [ X ]

Filed by a Party other than the Registrant [  ]

Check the appropriate box:
[ x ]  Preliminary Proxy Statement
[   ]  Definitive Proxy Statement
[   ]  Definitive Additional Materials
[   ]  Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[   ]  Confidential, For Use of the Commission Only (as permitted by
       Rule 14a-6(e)(2))



                       LIBERTY ALL-STAR EQUITY FUND
              ________________________________________________
               (Name of Registrant as Specified In Its Charter)

    _______________________________________________________________________
   (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[ X ]  No fee required.

[   ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

       1) Title of each class of securities to which transaction applies:


       2)  Aggregate number of securities to which transaction applies:


       3)  Per unit price or other underlying value of transaction computed
           pursuant to Exchange Act Rule 0-11 (set forth the amount on which
           the filing fee is calculated and state how it was determined):

       4)  Proposed maximum aggregate value of transaction:


       5)  Total fee paid:


 [   ]    Fee paid previously with preliminary materials:


 [   ]    Check box if any part of the fee is offset as provided by Exchange
          Act Rule 0-11(a)(2) and identify the filing for which the offsetting
          fee was paid previously.  Identify the previous filing by
          registration statement number, or the form or schedule and the date
          of its filing.

      1)  Amount Previously Paid:


      2)  Form, Schedule or Registration Statement no.:


      3)  Filing Party:


      4)  Date Filed:


<PAGE>
                           [Preliminary]
                   LIBERTY ALL-STAR EQUITY FUND
                       Federal Reserve Plaza
                   Boston, Massachusetts 02210
                        (617) 722-6000

           NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                                                                 April 19, 2000

To the Shareholders of Liberty All-Star Equity Fund:

         NOTICE  IS  HEREBY  GIVEN  that  the   thirteenth   Annual  Meeting  of
Shareholders  of Liberty  All-Star Equity Fund (the "Fund") will be held in Room
AV-1,  3rd  Floor,   Federal  Reserve  Plaza,  600  Atlantic   Avenue,   Boston,
Massachusetts,  on April 19, 2000 at 9:30 a.m.,  Boston time. The purpose of the
Meeting is to consider and act upon the following matters:

1. To elect two Trustees of the Fund.

2. To approve or disapprove the Fund's Portfolio  Management  Agreement with TCW
   Funds Management, Inc.

3. To approve or disapprove a new Portfolio  Management  Agreement with
   Oppenheimer Capital which will replace the current Portfolio Management
   Agreement  which will  terminate  upon change in control of Oppenheimer
   Capital upon acquisition by Allianz AG.

4. To  ratify  the   selection   by  the  Board  of  Trustees  of
   PricewaterhouseCoopers  LLP as the Fund's independent auditors
   for the year ending December 31, 2000.

5. To transact  such other  business as may properly  come before the
   Meeting or any adjournments thereof.

         The Board of  Trustees  has fixed the close of  business on February 1,
2000 as the record date for the  determination  of the  shareholders of the Fund
entitled to notice of, and to vote at, the Meeting and any adjournments thereof.

         YOUR BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR ALL THE PROPOSALS.

                                    By order of the Board of Trustees



                                    Nancy L. Conlin, Secretary


         YOUR VOTE IS IMPORTANT--PLEASE RETURN YOUR PROXY PROMPTLY.


      YOU ARE CORDIALLY  INVITED TO ATTEND THE MEETING.  WE URGE YOU, WHETHER
OR NOT YOU EXPECT TO ATTEND  THE  MEETING IN PERSON,  TO  INDICATE  YOUR  VOTING
INSTRUCTIONS  ON THE  ENCLOSED  PROXY,  DATE AND SIGN IT,  AND  RETURN IT IN THE
ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. WE ASK
YOUR COOPERATION IN MAILING YOUR PROXY PROMPTLY.

      YOUR BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR ALL OF THE PROPOSALS.

February 28, 2000


<PAGE>



                      LIBERTY ALL-STAR EQUITY FUND
                            PROXY STATEMENT
                      Annual Meeting of Shareholders

                                                               April 19, 2000

         This Proxy Statement is furnished in connection  with the  solicitation
of proxies on behalf of the Board of  Trustees of Liberty  All-Star  Equity Fund
(the "Fund") to be used at the Annual Meeting of  Shareholders of the Fund to be
held on April 19, 2000 at 9:30 a.m. Boston time in Room AV-1, 3rd Floor, Federal
Reserve  Plaza,  600  Atlantic  Avenue,  Boston,   Massachusetts,   and  at  any
adjournments thereof (such meeting and any adjournments being referred to as the
"Meeting").

         The  solicitation  of  proxies  for use at the  Meeting  is being  made
primarily by the mailing on or about  February 28, 2000 of this Proxy  Statement
and the accompanying  proxy.  Supplementary  solicitations  may be made by mail,
telephone,  telegraph or personal interview by officers and Trustees of the Fund
and officers and  employees of its manager,  Liberty  Asset  Management  Company
("Liberty  Asset  Management")  and its  affiliates.  In addition,  the Fund has
retained  Corporate  Investor  Communications,  Inc. as agent to coordinate  the
distribution  of proxy  material to, and to solicit the return of proxies  from,
banks,  brokers,  nominees  and  other  custodians  at a fee of  $________  plus
out-of-pocket expenses. Authorization to execute proxies may be obtained through
telephonically  or  electronically  transmitted  instructions.  The  expenses in
connection  with  preparing  this Proxy  Statement  and of the  solicitation  of
proxies  for the  Meeting  will be paid by the  Fund.  The Fund  will  reimburse
brokerage  firms  and  others  for their  expenses  in  forwarding  solicitation
material to the beneficial owners of shares. This Proxy Statement is accompanied
by the Fund's 1999 Annual Report to Shareholders.

         The Meeting is being held to vote on the matters described below.

PROPOSAL 1. ELECTION OF TRUSTEES

         The Fund 's Board of Trustees is divided  into three  classes,  each of
which serves for three years.  The term of office of one of the classes  expires
at the final  adjournment  of the Annual  Meeting of  Shareholders  (or  special
meeting in lieu thereof) each year.  Unless authority is withheld,  the enclosed
proxy will be voted for the election of Robert J.  Birnbaum and William E. Mayer
as Trustees to hold office until the final  adjournment of the Annual Meeting of
Shareholders  for the year 2003 (or special  meeting in lieu  thereof).  Messrs.
Birnbaum and Mayer have served as Trustees since November, 1994 and April, 1998,
respectively.  Messrs.  Birnbaum  and Mayer have  consented to serve as Trustees
following  the  Meeting if  elected,  and are  expected  to be able to do so. If
either  of them is  unable  or  unwilling  to do so at the time of the  Meeting,
proxies will be voted for such substitute as the Trustees may recommend  (unless
authority to vote for the election of Trustees has been withheld).



<PAGE>
<TABLE>
<CAPTION>

         Information about the nominees for election as a Trustee follows:

Name/Age and Address                     Principal Occupation During Past Five Years                 Fund Shares Owned(1)
<S>                                      <C>                                                       <C>
Robert J. Birnbaum (Age 72)(2)           Retired (since January, 1994); Special Counsel,
313 Bedford Road                         Dechert, Price & Rhoads (September, 1988 to December,
Ridgewood, NJ  07450                     1993); President and Chief Operating Officer, New
                                         York Stock Exchange, Inc. (May, 1985 to June, 1988).
                                         Director  of  Dresdner  RCM Europe Fund
                                         (investment company).
                                                                                                     4,436

William E. Mayer (Age 59)                Partner, Development Capital, LLC (since December,
500 Park Avenue, 5th Floor               1996); Dean, College of Business and Management,
New York, New York  10022                University of Maryland (October, 1992 to November,
                                         1996); Dean, Simon Graduate School of Business,
                                         University of Rochester (October, 1991 to July,
                                         1992). Director of Johns Manville Corporation
                                         (building products) and Chart House Enterprises
                                         (restaurant/food).

</TABLE>


         The following  Trustees  continue to serve in such capacity until their
terms of office expire and their successors are elected and qualified:
<TABLE>
<CAPTION>

Name/Age and Address                     Principal Occupation During Past Five Years              Fund Shares Owned(1)
- --------------------                     --------------------------------------------------       --------------------
<S>                                      <C>                                                      <C>
John V. Carberry (Age 52)(3)             Senior Vice President, Liberty Financial Companies,
Liberty Financial                        Inc. (since February, 1998); Managing Director,
Companies, Inc.                          Salomon Brothers, Inc. (December, 1974 to February,
600 Atlantic Avenue                      1998).                                                    1,084
Boston, MA  02210

James E. Grinnell (Age 70)(2)            Private investor (since November, 1988); President
22 Harbor Avenue                         and Chief Executive Officer, Distribution Management
Marblehead, MA  01945                    Systems, Inc. (1983 to May, 1986); Senior Vice
                                         President-Operations, The Rockport Company, importer
                                         and distributor of shoes (May, 1986 to November,
                                         1988).                                                   13,616

</TABLE>


<PAGE>
<TABLE>
<CAPTION>

Name/Age and Address                     Principal Occupation During Past Five Years              Fund Shares Owned(1)
- --------------------                     --------------------------------------------------       --------------------
<S>                                      <C>                                                      <C>
Richard W. Lowry (Age 63)(2)             Private investor (since August, 1987); Chairman and
10701 Charleston Drive                   Chief Executive Officer, U.S. Plywood Corporation,
Vero Beach, FL  32963                    manufacturer and distributor of wood products
                                         (August, 1985 to August, 1987).                           79,152


John J. Neuhauser (Age 56)               Academic Vice President and Dean of Faculties, Boston
84 College Road                          College (since August, 1999); Dean, Boston College
Chestnut Hill, MA  02467-3838            School of Management (since September, 1977 to
                                         September, 1999). Director of Hyde Athletic
                                         Industries, Inc. (athletic footwear).
</TABLE>

- -----------------------
(1) Shows all shares owned beneficially,  directly or indirectly,  on the record
date for the Meeting. Such ownership includes voting and investment control. The
Fund's Trustees and officers as a group then so owned less than 1% of the shares
of the Fund outstanding.

(2) Member of the Audit Committee.

(3) "Interested person" of the Fund, as defined in the Investment Company Act of
1940, by reason of his positions  with Liberty  Financial  Companies,  Inc., the
indirect parent of Liberty Asset Management, and its affiliates.

(4) Held by the trustee of a trust of which Mr. Lowry is the sole beneficiary.

         As of  February  1,  2000,  ________________  of the  Fund,  and  other
officers  of  Liberty   Financial   Companies,   Inc.  or  its  affiliates  held
_____________  shares  of the  Fund,  representing  ______%  of the  outstanding
shares,  as co-trustees of the Liberty  Financial  Companies,  Inc.  Savings and
Investment Plan as to which they share voting power.

         The term of office of Messrs.  Lowry and Neuhauser will expire on final
adjournment  of the Annual  Meeting (or special  meeting in lieu thereof) in the
year 2001,  and the term of office of Messrs.  Carberry and Grinnell will expire
on final  adjournment of the Annual Meeting (or special meeting in lieu thereof)
in 2002.  Mr.  Carberry  has  served  as a Trustee  since  December,  1997,  Mr.
Neuhauser has served as Trustees  since April,  1998,  and Messrs.  Grinnell and
Lowry have served as a Trustee since the  commencement of the Fund's  operations
in 1986. Messrs. Birnbaum,  Carberry,  Grinnell,  Lowry, Mayer and Neuhauser are
also  trustees of  Colonial  Trusts I through VII (the  "Liberty  Trusts"),  the
umbrella  trusts for an aggregate of 52 open-end  funds (the  "Colonial  Funds")
managed  by  Colonial  Management  Associates,   Inc.  ("Colonial"),   or  other
affiliates  of  Liberty  Asset  Management,  nine  closed-end  funds  managed by
Colonial  (the  "Colonial  Closed-End  Funds"),  Liberty  Funds Trust  VIII,  an
open-end investment company managed by Stein Roe & Farnham Incorporated, another
affiliate  of Liberty  Asset  Management,  Liberty  Funds Trust IX, the umbrella
trust for Liberty  All-Star  Growth and Income Fund,  an open-end  multi-managed
fund managed by Liberty Asset Management and Liberty  Variable  Investment Trust
("LVIT"),  the umbrella  trust for 12 open-end  funds managed by Colonial or its
affiliates that serve as investment vehicles for variable annuities and variable
life  insurance  products,  and Liberty  All-Star  Growth  Fund,  Inc.,  another
closed-end multi-manager fund managed by Liberty Asset Management.

         During 1999 the full Board of Trustees of the Fund held four  meetings,
and the Audit  Committee,  which is  comprised  of all the  Trustees who are not
"interested  persons" of the Fund, met three times. All Trustees were present at
all meetings.

         The Audit Committee makes  recommendations  to the full Board as to the
firm of independent  accountants to be selected,  reviews the methods, scope and
results of audits and fees charged by such  accountants,  and reviews the Fund's
internal  accounting  procedures  and  controls.  The Fund has no  nominating or
compensation committee.

Compensation

         Liberty Asset  Management or its affiliates pay the compensation of all
the officers of the Fund.  In 1999,  the Fund paid each  Trustee not  affiliated
with  Liberty  Asset  Management  (the  "independent  Trustees")  total  fees of
$14,000,  consisting of a $5,000 retainer and meeting fees  aggregating  $9,000.
The total fees  accrued to the  independent  Trustees as a group during the year
ended  December  31, 1999 by the Fund were  $70,000 and  out-of-pocket  expenses
relating to their attendance at meetings were $__________.

         The following  table shows,  for the year ended  December 31, 1999, the
compensation  received from the Fund by each current Trustee,  and the aggregate
compensation  paid to each current  Trustee for service on the Board of Trustees
of the Fund and the Board of Trustees or  Directors of the Liberty  Trusts,  the
Colonial  Closed-End  Funds,  Liberty Funds Trust VIII,  Liberty Funds Trust IX,
LVIT and Liberty  All-Star  Growth Fund,  Inc.  (the  "Liberty  Funds  Complex")
comprised of an aggregate of _______ funds (including the Fund). The Fund has no
bonus, profit sharing or retirement plans.


<PAGE>




                      Aggregate Compensation from    Total Compensation from
Name                           the Fund              the Liberty Funds Complex
                                                     (including the Fund)
- ------                ----------------------------   -------------------
Robert J. Birnbaum        $14,000                      $

John V. Carberry            -0-                         -0-

James E. Grinnell         $14,000                      $

Richard                   $14,000                      $

William E. Mayer          $14,000                      $

John J. Neuhauser         $14,000                      $

         Beginning January 1, 1999, the aggregate of the fees to be paid to each
Trustee  by the Fund and by Liberty  All-Star  Growth  Fund,  Inc.  and  Liberty
All-Star  Growth and Income  Fund,  two other  investment  companies  managed by
Liberty  Asset  Management  that have the same Board of Trustees or Directors as
the Fund and hold  their  meetings  concurrently  with  those of the Fund,  will
consist of a retainer of $10,000, plus a fee of $3,000 per meeting attended with
a minimum  of  $15,000  per annum if less  than five  meetings  are held and all
meetings are attended.  One third of the retainer and the fees for  concurrently
held meetings will be allocated  among the Fund and the two other funds on a per
fund basis, and the remaining two thirds will be allocated among the three funds
based on their net assets.

Officers

         The following  are the  executive  officers of the Fund, in addition to
Mr. John V. Carberry who serves as Chairman of the Board of Trustees.

<TABLE>
<CAPTION>
                                                                            Principal Occupation During
Name/Age and Address                             Position with Fund         Past Five Years
- ---------------------                            ------------------         ------------------------------
<S>                                              <C>                        <C>

William R. Parmentier, Jr. (Age 47)              President, Chief           President and Chief Executive Officer (since
Liberty Asset Management Company                 Executive                  June, 1998) and Chief Investment Officer (since
600 Atlantic Avenue                              Officer and Chief          May, 1995), Senior Vice President (May, 1995 to
Boston, MA  02210                                Investment Officer         June, 1998), Liberty Asset Management; Consultant
                                                                            (October, 1994 to May, 1995); President, GQ Asset
                                                                            Management, Inc.(July, 1993 to October, 1994);
                                                                            Assistant Treasurer, Grumman Corporation
                                                                            (December, 1974 to July, 1993).



Christopher S. Carabell (Age 36)                 Vice President             Senior Vice President - Product Development and
Liberty Asset Management Company                                            Marketing (since January, 1999), Vice
600 Atlantic Avenue                                                         President-Investments, Liberty Asset Management
Boston, MA  02210                                                           (March, 1996 to January, 1999); Associate
                                                                            Director, U.S. Equity Research, Rogers
                                                                            Casey & Associates, investment consultants
                                                                            (January, 1995 to February, 1996); Director
                                                                            of Investments, Boy Scouts of America (June, 1990
                                                                            to January, 1995).

Mark T. Haley (Age 35)                           Vice President             Vice President-Investments (since January,
Liberty Asset Managewment Company                                           1999), Director of  Investment  Analysis
600 Atlantic Avenue                                                         (December, 1996 to  December,  1998),
Boston, MA 02210                                                            Investment  Analyst (January, 1994 to November, 1996),
                                                                            Liberty Asset Management.


Joseph R. Palombo (Age 46)                       Vice President             Vice President, Liberty Trusts (since April,
Liberty Funds Group                                                         1999); Executive Vice President and Director,
One Financial Center                                                        Colonial (since April, 1999); Executive Vice
Boston, MA 02111                                                            President and Chief Administrative Officer,
                                                                            Liberty Funds Group LLC (LFG)(since April, 1999);
                                                                            Managing Director, Putnam Investments (from
                                                                            December, 1993 to January, 1999).

Timothy J. Jacoby (Age 47)                       Treasurer                  Treasurer and Chief Financial Officer, Liberty
Liberty Funds Group                                                         Trusts (since October, 1996); Senior Vice
245 Summer Street                                                           President (since September, 1996), Chief
Boston, MA  02111                                                           Financial Officer and Treasurer (July, 1997 to
                                                                            December, 1999), Colonial; Senior Vice President,
                                                                            Fidelity Accounting and Custody Services (October,
                                                                            1993 to September, 1996); Assistant Treasurer,
                                                                            Fidelity Group of Funds (August, 1990 to
                                                                            September, 1993).

J. Kevin Connaughton (Age 35)                    Controller                 Controller and Chief Accounting Officer, Liberty
Liberty Funds Group                                                         Trusts and Vice President, Colonial (since
245 Summer Street                                                           February, 1998); Senior Tax Manager, Coopers &
Boston, MA  02210                                                           Lybrand, LLP (April, 1996 to January, 1998); Vice
                                                                            President, 440 Financial Group/First Data Investor
                                                                            Services Group(March, 1994 to April, 1996); Vice
                                                                            President, The Boston Company (subsidiary of
                                                                            Mellon Bank)(December, 1993 to March, 1994).

Nancy L. Conlin (Age 46)                         Secretary                  Secretary, Liberty Trusts (since April, 1998);
Liberty Funds Group                                                         Assistant Secretary, Liberty Trusts (July, 1994
One Financial Center                                                        to April, 1998); Director, Senior Vice President,
Boston, MA 02111                                                            General Counsel, Clerk and Secretary, Colonial
                                                                           (since April, 1998); Vice President, Counsel,
                                                                            Assistant Secretary and Assistant Clerk,
                                                                            Colonial (July, 1994 to April, 1998); Vice
                                                                            President, General Counsel and Secretary,
                                                                            LFG (since December, 1998); Vice President,
                                                                            General Counsel and Clerk, LFG (April, 1998 to
                                                                            December, 1998); Assistant Clerk, LFG (July, 1994
                                                                            to April, 1998).

</TABLE>

         Mr.  Carberry  has served as Chairman of the Board since June 30, 1998;
Mr.  Parmentier  has served as  President,  Chief  Executive  Officer  and Chief
Investment  Officer  since April 29,  1999;  Mr.  Carabell was elected as a Vice
President on April 17, 1997, and Messrs.  Haley and Palombo were elected as Vice
Presidents on April 29, 1999,  respectively;  Mr. Jacoby was appointed Treasurer
effective October 10, 1996; Mr.  Connaughton was elected Controller on April 23,
1998; and Ms. Conlin has served as Secretary  since April 29, 1999. Mr. Carberry
is a Director/Trustee of, and Messrs. Jacoby and Connaughton and Ms. Conlin hold
the same offices with,  Liberty  All-Star Growth Fund, Inc., the Liberty Trusts,
the Colonial  Closed-End Funds, LVIT, Liberty Funds Trust VIII and Liberty Funds
Trust IX, and Messrs.  Carabell, Haley and Parmentier hold the same offices with
Liberty  All-Star  Equity Fund and Liberty  Funds Trust IX. Each  officer of the
Fund serves at the pleasure of the Board of Directors


<PAGE>



PROPOSAL 2.  TO APPROVEOR DISAPPROVE PORTFOLIO MANAGEMENT AGREEMENT WITH TCW
              FUNDS MANAGEMENT, INC.

Background - The Multi-Manager Methodology

         The Fund allocates its portfolio assets on an approximately equal basis
among a number of independent investment management firms ("Portfolio Managers")
recommended by Liberty Asset Management, currently five in number, each of which
employs a  different  investment  style,  and from time to time  rebalances  the
portfolio among the Portfolio Managers so as to maintain an approximately  equal
allocation of the portfolio among them throughout all market cycles.  The Fund's
multi-manager   methodology  is  based  on  the  premise  that  most  investment
management firms  consistently  employ a distinct  investment style which causes
them to emphasize stocks with particular  characteristics,  and that, because of
changing investor preferences, any given investment style will move into and out
of market  favor and will  result in better  performance  under  certain  market
conditions  but  poorer   performance   under  other   conditions.   The  Fund's
multi-manager  methodology  seeks to achieve more  consistent  and less volatile
performance over the long-term than if a single Portfolio Manager were employed.

         The  Portfolio   Managers   recommended  by  Liberty  Asset  Management
represent a blending of different  styles which, in its opinion,  is appropriate
for the Fund's investment  objective and which is sufficiently  broad so that at
least one of such styles can  reasonably  be  expected to be in relative  market
favor in all reasonably foreseeable market conditions.  Liberty Asset Management
continuously analyses and evaluates the investment performance and portfolios of
the Fund's  Portfolio  Managers and from time to time recommends  changes in the
Portfolio  Managers.  Such  recommendations  could be based on factors such as a
change  in a  Portfolio  Manager's  investment  style or a  Portfolio  Manager's
divergence from the investment  style for which it was selected,  changes deemed
by Liberty Asset Management to be potentially  adverse in a Portfolio  Manager's
personnel or ownership or other structural or  organizational  changes affecting
the Portfolio Manager,  or a deterioration in a Portfolio  Manager's  investment
performance when compared to that of other investment management firms employing
similar investment styles.  Portfolio Manager changes may also be made to change
the  mix of  investment  styles  employed  by  the  Fund's  Portfolio  Managers.
Portfolio Manager changes, as well as rebalancings of the Fund's portfolio among
the Portfolio Managers, may result in portfolio turnover in excess of what would
otherwise  be the  case.  Increased  portfolio  turnover  results  in  increased
brokerage commission and transaction costs, and may result in the recognition of
additional capital gains.

New Portfolio Manager

         Due to changes in the investment  personnel of  Wilke/Thompson  Capital
Management, Inc. ("Wilke/Thompson"), a Portfolio Manager of the Fund since March
1, 1997 whose portfolio  management agreement with the Fund had been ratified by
shareholders  on April  16,  1997,  and other  related  factors,  Liberty  Asset
Management  in early 1999  determined  to replace  Wilke/Thompson  with  another
Portfolio Manager practicing a similar  _____________  investment style. Liberty
Asset Management first analyzed information regarding the personnel,  investment
process  and  performance  of a large  number  of  investment  management  firms
practicing such an investment style, ultimately reducing the number of potential
candidates  to  _______.  Liberty  Asset  Management  then  analyzed  the  three
candidates  in  terms  of  their  historic  returns,  volatility  and  portfolio
characteristics  when  combined  with those of the Fund's  four other  Portfolio
Managers.  Based on the foregoing and on Liberty Asset Management's  qualitative
analysis,  Liberty Asset  Management  recommended,  and the Board of Trustees on
October,  1999  approved,  the  termination of the Fund's  portfolio  management
agreement with  Wilke/Thompson.  and its replacement with TCW Funds  Management,
Inc. ("TCW"), effective November 1, 1999.

         TCW, 865 South Figueroa  Street,  Los Angeles,  California  90017,  was
founded As of December  31, 1999,  TCW had over $______  billion in assets under
management. See Appendix A for further information about TCW.

         Mr. Glen E. Bickerstaff, Managing Director U.S. Equities, manages that
portion of the Fund's portfolio assigned to TCW.  Prior to joining TCW in 1998,
Mr. Bickerstaff was a portfolio manager at Transamerica
Investment Services.  Mr. Donovan has over 19 years of investment experience.

         Reference is made to MANAGEMENT - Portfolio  Transactions and Brokerage
below for the direction by the Fund's Portfolio Managers, including TCW, of Fund
portfolio  transactions to  broker-dealers  that make certain research  services
available to Liberty Asset Management.

         Under the terms of an  exemptive  order  issued to the Fund and Liberty
Asset Management by the Securities and Exchange  Commission,  the Fund may enter
into a portfolio management agreement with a new or additional Portfolio Manager
recommended  by Liberty  Asset  Management in advance of  shareholder  approval,
provided that the new agreement is at a fee no higher than that provided in, and
is on other terms and conditions substantially similar to, the Fund's agreements
with its other  Portfolio  Managers,  and that its  continuance  is  subject  to
approval by shareholders at the Fund's  regularly  scheduled annual meeting next
following  the  date  of the  portfolio  management  agreement  with  the new or
additional  Portfolio  Manager.  Accordingly,  the Fund's  portfolio  management
agreement with TCW is being submitted for shareholder approval at the Meeting.

 Terms of Portfolio Management Agreement with TCW

         The portfolio  management  agreement  with TCW is at the same fee rates
and is on other  terms  and  conditions  substantially  similar  to those of the
portfolio management agreements with the Fund's four other Portfolio Managers. A
copy of the portfolio  management  agreement  with TCW is attached to this proxy
statement as Appendix B.

         Under the Fund's portfolio management  agreements  (including that with
TCW), each Portfolio Manager has discretionary  investment  authority (including
the selection of brokers and dealers for the  execution of the Fund's  portfolio
transactions)  with respect to the portion of the Fund's assets  allocated to it
by Liberty Asset Management from time to time,  subject to the Fund's investment
objective and policies,  to the supervision and control of the Trustees,  and to
instructions from Liberty Asset Management.  The Portfolio Managers are required
to use their best professional  judgment in making timely  investment  decisions
for the Fund. The Portfolio  Managers,  however,  will not be liable for actions
taken or omitted in good faith and believed to be within the authority conferred
by their portfolio management  agreements and without willful  misfeasance,  bad
faith or gross negligence.

         From the fund  management  fees it  receives  from the Fund  (0.80% per
annum of the Fund's average weekly net asset value up to $400 million, 0.72% per
annum of such average  weekly net asset value  exceeding $400 million up to $800
million, 0.648% of such average weekly net asset value exceeding $800 million up
to $1.2 billion,  and 0.584% of such average weekly net asset value in excess of
$1.2  billion),  Liberty  Asset  Management  pays each of the  Fund's  Portfolio
Managers 0.40% per annum of the average weekly net asset value of the portion of
the Fund's assets managed by that Portfolio  Manager,  with such rate reduced to
0.36% per annum of the  Portfolio  Managers'  allocable  portions  of the Fund's
average  weekly net asset  value in excess of $400  million up to $800  million,
0.324% of their  allocable  portions  of such  average  weekly  net asset  value
exceeding  $800  million  up to $1.2  billion,  and  0.292%  of their  allocable
portions of such average weekly net asset value exceeding $1.2 billion.
As at February 11, 1999, the Fund's net assets were $__________.

         If approved by  shareholders at the Meeting,  the Portfolio  Management
Agreement  with TCW will  remain in effect  until  October  31,  2001,  and will
continue  thereafter  until  terminated  by the Fund or the  Portfolio  Manager,
provided  such  continuance  is  approved  at  least  annually  by the  Board of
Trustees,  including a majority of the independent Trustees, or by the vote of a
"majority of the outstanding  voting securities" (as defined under Required Vote
below) of the Fund.

Required Vote

         Approval of the portfolio  management  agreement  with TCW requires the
affirmative  vote of a "majority of the  outstanding  voting  securities" of the
Fund,  which,  under the Investment  Company Act of 1940,  means the affirmative
vote of the lesser of (a) 67% or more of the  shares of the Fund  present at the
Meeting  or  represented  by  proxy  if the  holders  of  more  than  50% of the
outstanding  shares are present or represented by proxy, or (b) more than 50% of
the outstanding shares. See INFORMATION ABOUT THE MEETING below.

         In the event  that the  shareholders  of the Fund fail to  approve  the
portfolio  management  agreement  with TCW, the  agreement  will  terminate  and
Liberty Asset Management will cause the portfolio assets under management by TCW
to be reallocated to one or more of the other Portfolio  Managers or invested in
money  market  instruments  or  other  cash  equivalent   holdings  pending  the
reappointment of TCW or the appointment of a new Portfolio Manager.

         The Board of Trustees unanimously recommends that the shareholders vote
FOR approval of the portfolio management agreement with TCW.


<PAGE>

PROPOSAL  3.  TO  APPROVE  OR   DISAPPROVE  A  NEW   PORTFOLIO  MANAGEMENT
              AGREEMENT WITH  OPPENHEIMER  CAPITAL WHICH WILL REPLACE THE
              CURRENT PORTFOLIO MANAGEMENT AGREEMENT WHICH WILL TERMINATE UPON
              CHANGE IN CONTROL OF UPON ACQUISITION BY ALLIANZ AG.

Background

         The Fund allocates its portfolio assets on an approximately equal basis
among a number of independent investment management firms ("Portfolio Managers")
recommended  by Liberty Asset  Management,  currently  three in number,  each of
which employs a different investment style, and from time to time rebalances the
portfolio among the Portfolio Managers so as to maintain an approximately  equal
allocation  of the  portfolio  among  them  throughout  all market  cycles.  The
Portfolio Managers  recommended by Liberty Asset Management represent a blending
of  different  styles  which,  in its  opinion,  is  appropriate  for the Fund's
investment  objective.   Liberty  Asset  Management  continuously  analyzes  and
evaluates the  investment  performance  and  portfolios of the Fund's  Portfolio
Managers and from time to time recommends changes in the Portfolio Managers.

         One of the Fund's Portfolio Managers,  Oppenheimer Capital, a Portfolio
Manager  of the  Fund,  will  undergo  a change  of  control  as a result of the
consummation  of  the  Transaction  described  below  under  Description  of the
Transaction,  resulting in the automatic termination of its Portfolio Management
Agreement  dated August 1, 1998.  After reviewing the proposed change of control
transactions and considering Liberty Asset Management's  opinion that they would
not have an  adverse  effect on the  nature or  quality  of the  services  being
provided by  Oppenheimer  Capital,  the Board of  Trustees on December  15, 1999
approved  a  new  portfolio   management  agreement  at  the  same  fee  and  on
substantially  identical other terms and conditions as the prior agreement,  and
the new agreement  will be executed  effective with the closing of the change in
control transactions.

         Under the terms of an  exemptive  order  issued to the Fund and Liberty
Asset  Management by the  Securities and Exchange  Commission,  the Fund may, in
advance of shareholder approval, enter into a new portfolio management agreement
with a Portfolio  Manager or its successor  following a change in control of the
Portfolio  Manager,  provided that the new agreement is at a fee no higher than,
and is on other  terms and  conditions  substantially  similar  to,  the  Fund's
agreements  with its  other  Portfolio  Managers,  and that its  continuance  is
subject  to  approval  by  shareholders  at  the  Fund's  next  annual  meeting.
Accordingly,  the Fund's new portfolio  management  agreement  with  Oppenheimer
Capital is being submitted for shareholder approval at the Meeting. See Appendix
C for the new Portfolio Management Agreement.

         The Fund's initial  portfolio  management  agreement  with  Oppenheimer
Capital was approved by  shareholders  on April 20,1990.  Following  shareholder
approval on April 22, 1998,  the Fund entered  into a new  portfolio  management
agreement  with  Oppenheimer  Capital on August 1, 1998,  following  a change in
control.  For the fiscal  year ended  December  31,  1999,  Oppenheimer  Capital
received  $______________ for its portfolio management services to the Fund. Mr.
John  Lindenthal,  Managing  Director of  Oppenheimer  Capital,  has managed the
portion of the Fund's  portfolio  allocated  to  Oppenheimer  Capital  since its
initial appointment as a Fund Portfolio Manager in February, 1990, and continues
to do so.

         See Appendix D for information  regarding other  registered  investment
companies  with  investment  objectives  similar  to  the  Fund's  for  which  a
subsidiary of  Oppenheimer  Capital  provides  investment  advisory or portfolio
management services.


<PAGE>



Description of the Transaction


         Description  of the  Transaction.  On October 31, 1999,  PIMCO Advisors
L.P. ("PIMCO Advisors"),  its two general partners, PIMCO Advisors Holdings L.P.
("PAH") and PIMCO Partners G.P.  ("Partners GP"),  certain of their  affiliates,
Allianz of America,  Inc. ("Allianz of America") and certain other parties named
therein  entered  into an  Implementation  and  Merger  Agreement  (the  "Merger
Agreement") pursuant to which Allianz of America will acquire majority ownership
of PIMCO Advisors.

         As a result of the transactions  contemplated by the Merger  Agreement,
Allianz of America will control PIMCO Advisors,  having  acquired  approximately
70% of the outstanding  partnership  interests in PIMCO Advisors (together,  the
"Transaction"),  while the  remainder  will  continue to be held  indirectly  by
Pacific  Life.  The  Transaction  is expected to be  completed by the end of the
first quarter of 2000,  although there is no assurance that the Transaction will
be completed.

         Oppenheimer  Capital,  an  indirect  wholly-owned  subsidiary  of PIMCO
Advisors,  serves as investment  manager of the Fund.  Oppenheimer  Capital will
undergo a change of control as a result of the  consummation of the Transaction,
resulting in the  automatic  termination  of its current  investment  management
agreement  with  the  Fund  (the  "Existing  Management  Agreement").  Following
completion  of the  Transaction,  it is expected that  Oppenheimer  Capital will
continue to serve as investment  manager of the Fund.  Therefore,  in connection
with the Transaction  and as required by the Investment  Company Act of 1940, as
amended (the "1940 Act"), shareholders of the Fund are being asked in Proposal 5
to  approve  an  investment  management  agreement  between  the Fund and  PIMCO
Advisors which is substantially  identical to the Existing Management  Agreement
(the "New  Management  Agreement").  If the Transaction is not completed for any
reason, the agreement will terminate and Liberty Asset Management will cause the
portfolio assets under management by Oppenheimer Capital to be invested in money
market instruments or other cash equivalent  holdings or derivative  investments
pending the  reappointment  of Oppenheimer  Capital or the  appointment of a new
Portfolio Manager

         Post-Transaction  Structure  and  Operations.  Upon  completion  of the
Transaction, PIMCO Advisors and its subsidiaries, including Oppenheimer Capital,
will be  controlled  by  Allianz  of  America.  Allianz  of America is a holding
company that owns several  insurance  and financial  service  companies and is a
subsidiary  of Allianz AG which,  together with its  subsidiaries,  comprise the
world's second largest insurance group as measured by premium income. Allianz of
America will control  PIMCO  Advisors  through its managing  member  interest in
PacPartners  LLC,  which  will be the sole  general  partner  of PIMCO  Advisors
following the  Transaction.  While  Allianz of America will control  PacPartners
LLC,  Pacific  Life will  hold a portion  of its  continuing  interest  in PIMCO
Advisors  through an interest in PacPartners  LLC.  Allianz of America,  through
subsidiaries,  will be the managing member of PacPartners LLC and will have full
authority and control over all actions taken by  PacPartners  LLC as the general
partner of PIMCO Advisors,  provided that Pacific Life's consent is required for
certain extraordinary actions.

         Operationally,  PIMCO Advisors is expected to become a unit of
Allianz  Asset  Management  ("AAM"),  the division of Allianz  that  coordinates
global Allianz asset management activities.  PIMCO Advisors and its subsidiaries
are  currently  expected to continue to operate in the United States under their
existing names.

         Description  of Allianz and Its  Affiliates.  Allianz AG, the parent of
Allianz of America,  is a publicly traded German  Aktiengesellschaft  and which,
together with its  subsidiaries,  comprise the world's second largest  insurance
group as  measured  by  premium  income.  Allianz  AG is a leading  provider  of
financial  services,  particularly in Europe, and is represented in 68 countries
world-wide through  subsidiaries,  branch and representative  offices, and other
affiliated entities.  The Allianz group currently has assets under management of
more than $390  billion,  and in its last  fiscal year wrote  approximately  $50
billion in gross insurance premiums. After completion of the Transaction,  PIMCO
Advisors and the Alliance  group  combined will have over $650 billion in assets
under management.  Allianz AG's address is: Koniginstrasse 28, D-80802,  Munich,
Germany.

        Affiliates of Allianz AG currently  include  Dresdner Bank AG, Deutsche
Bank AG,  Munich Re, and  HypoVereinsbank.  These  entities,  as well as certain
broker-dealers that might be deemed to be controlled by or affiliated with these
entities,  such as Bankers Trust Company, BT Alex. Brown Incorporated,  Deutsche
Bank  Securities,  Inc. and Dresdner  Kleinwort Benson North America LLC, may be
considered as "Affiliated Brokers". Once the Transaction is completed, absent an
SEC  exemption or other  relief,  the Fund would  generally  be  precluded  from
effecting principal transactions with the Affiliated Brokers, and its ability to
purchase securities from underwriting  syndicates including an Affiliated Broker
or to utilize the Affiliated Brokers for agency transactions would be subject to
restrictions.  Oppenheimer Capital does not believe that applicable restrictions
on  transactions  with the Affiliated  Brokers  described  above will materially
adversely affect its ability, post-closing, to provide services to the Fund, the
Fund's ability to take advantage of market opportunities,  or the Fund's overall
performance.

         Section 15(f) of the 1940 Act.  Section 15(f) provides a  non-exclusive
safe harbor for an investment  adviser or any affiliated  persons to receive any
amount or benefit  in  connection  with a change of  control  of the  investment
adviser to an investment company as long as two conditions are satisfied. First,
an "unfair  burden"  must not be imposed on  investment  company  clients of the
adviser  as a result  of the  transaction,  or any  express  or  implied  terms,
conditions or  understandings  applicable to the  transaction.  The term "unfair
burden"  (as  defined  in the 1940 Act)  includes  any  arrangement  during  the
two-year  period  after the  transaction  whereby  the  investment  advisor  (or
predecessor or successor advisor), or any "interested person" (as defined in the
1940 Act) (an "Interested Person") of any such adviser,  receives or is entitled
to receive any  compensation,  directly or  indirectly,  from such an investment
company  or its  security  holders  (other  than fees for bona  fide  investment
advisory or other  services)  or from any other  person in  connection  with the
purchase or sale of securities  or other  property to, from or on behalf of such
investment  company.  The Board of  Trustees of the Fund has been  advised  that
neither PIMCO  Advisors nor  Oppenheimer  Capital is aware of any  circumstances
arising from the Transaction that might result in an unfair burden being imposed
on the Fund.  Allianz and each of the other parties to the Agreement have agreed
to use their reasonable best efforts to assure  compliance with Section 15(f) as
it applies to the Transaction during such two-year period.

         The second  condition  of Section  15(f) is that during the  three-year
period after the  transaction,  at least 75% of each such  investment  company's
board of directors must not be Interested  Persons of the investment advisor (or
predecessor  or successor  advisor).  The Fund has been advised by LAMCO that an
unfair burden will not be placed on the Fund as at least 75% of the Fund's Board
of Trustees are not "Interested Persons" (as defined in the 1940 Act). Moreover,
Allianz  has agreed with PIMCO  Advisors  that it will use its  reasonable  best
efforts  to comply  with such 75%  requirement  during  such  three-year  period
through one or more intermediaries.

Required Vote

         Approval of the new portfolio  management  agreement  with  Oppenheimer
Capital requires the affirmative  vote of a "majority of the outstanding  voting
securities" of the Fund which,  under the Investment  Company Act of 1940, means
the affirmative  vote of the lesser of (a) 67% or more of the shares of the Fund
present at the Meeting or  represented  by proxy if the holders of more than 50%
of the outstanding  shares are present or represented by proxy, or (b) more than
50% of the outstanding shares.

The Board of Trustees  unanimously  recommends  that the  shareholders  vote FOR
approval of the portfolio management agreement with Oppenheimer Capital.

PROPOSAL 4. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

         By  vote  of  the  Board  of  Trustees,   including  the  vote  of  the
non-interested  Trustees,  the firm of Pricewaterhouse  LLP has been selected as
independent  auditors for the Fund for the year ending  December 31, 2000.  Such
selection  is  being  submitted  to  the  shareholders  for  ratification.   The
employment of  Pricewaterhouse  LLP is  conditioned  on the right of the Fund by
majority vote of its  shareholders to terminate such  employment.  Such firm has
acted as independent  auditors for the Fund since  September 30, 1999.  Prior to
September  30,  1999 and  PricewaterhouseCoopers  LLP is  completing  the Fund's
December  31, 1999 audit.  Prior to September  30,  1999,  KPMG Peat Marwick LLP
acted as independent  auditors for the Fund since its commencement of operations
in 1986.

         The  services  provided  by the Fund 's  independent  auditors  include
examination of its annual financial  statements,  assistance and consultation in
connection with Securities and Exchange  Commission  filings,  and review of the
Fund   's   annual    federal   income   tax   returns.    Representatives    of
PricewaterhouseCoopers  LLP are expected to be present at the  Meeting,  will be
given the  opportunity  to make a statement if they should so desire and will be
available to respond to appropriate questions.


OTHER BUSINESS

         The Board of Trustees  knows of no other  business to be brought before
the Meeting.  However, if any other matters properly come before the Meeting, it
is the  intention  of the  Board  that  proxies  that  do not  contain  specific
instructions  to the contrary will be voted on such matters in  accordance  with
the judgment of the persons designated therein as proxies.

MANAGEMENT

         Liberty Asset Management,  600 Atlantic Avenue,  Boston,  Massachusetts
02210,  is  the  Fund's  manager.   Liberty  Asset  Management  is  an  indirect
wholly-owned   subsidiary  of  Liberty  Financial   Companies,   Inc.  ("Liberty
Financial"),  the  address  of  which  is  also  600  Atlantic  Avenue,  Boston,
Massachusetts 02210.  Approximately 72% of the common stock of Liberty Financial
is owned through  subsidiaries  by Liberty  Mutual  Insurance  Company,  Boston,
Massachusetts,  and the balance is held by the public and listed on the New York
Stock Exchange. Liberty Asset Management's Chief Executive Officer is William R.
Parmentier (see PROPOSAL 1 - Officers),  and its Board of Directors is comprised
of Richard R. Christensen, Chairman of the Board of Liberty Asset Management and
President of the Fund, and Kenneth R. Leibler,  C. Allen Merritt Jr. and Lindsay
Cook, officers of Liberty Financial.  Pursuant to its fund management  agreement
with the Fund,  Liberty  Asset  Management  implements  and  operates the Fund's
multi-manager  methodology  described  under  PROPOSAL  2 above and has  overall
supervisory responsibility for the general management and investment of the Fund
's securities portfolio, subject to the Fund's investment objective and policies
and any directions of the Trustees.

         Liberty Asset Management is also responsible  under the Fund Management
Agreement for the provision of  administrative  services to the Fund,  including
the provision of office space,  shareholder  and  broker-dealer  communications,
compensation  of all  officers  and  employees  of the Fund who are  officers or
employees of Liberty Asset  Management or its  affiliates,  and  supervision  of
transfer agency,  dividend disbursing,  custodial and other services provided by
others. Certain of Liberty Asset Management's administrative responsibilities to
the Fund have been delegated to its affiliate,  Colonial Management  Associates,
Inc., One Financial Center, Boston,  Massachusetts 02111. For its administrative
services the Fund pays  Liberty  Asset  Management  an annual fee at the rate of
0.20% of the Fund's average weekly net asset value up to $400 million,  0.18% of
such average  weekly net asset value  exceeding $400 million up to $800 million,
0.162% of such average weekly net asset value  exceeding $800 million up to $1.2
billion,  and 0.146% of such  average  weekly net asset  value in excess of $1.2
billion.  This administrative  service fee is in addition to the fund management
fees paid by the Fund to Liberty Asset Management described above.

         The names and addresses of the Fund's current  Portfolio  Managers,  in
addition to TCW, are as follows:

         J.P. Morgan Investment          Westwood Management Corporation
           Management Inc.               300 Crescent Court
         522 Fifth Avenue                Dallas, TX  75201
         New York, NY  10036

         Oppenheimer Capital             Boston Partners Asset Management, L.P.
         Oppenheimer Tower               28 State Street
         World Financial Center          Boston, MA 02109
         New York, NY  10281

Portfolio Transactions and Brokerage

         Each of the Fund's Portfolio  Managers has discretion to select brokers
and dealers to execute portfolio transactions initiated by the Portfolio Manager
for the portion of the Fund's  portfolio  assets  allocated to it, and to select
the  markets  in which  such  transactions  are to be  executed.  The  portfolio
management  agreements  with the Fund provide,  in substance,  that in executing
portfolio   transactions   and  selecting   brokers  or  dealers,   the  primary
responsibility  of the Portfolio Manager is to seek to obtain best net price and
execution for the Fund.

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

         In addition,  under their portfolio management agreements with the Fund
and Liberty Asset Management,  the Portfolio  Managers,  in selecting brokers or
dealers  to execute  portfolio  transactions  for the Fund,  are  authorized  to
consider (and Liberty Asset Management may request them to consider)  brokers or
dealers  that provide to Liberty  Asset  Management,  directly or through  third
parties,  research products or services such as research reports;  subscriptions
to  financial  publications  and  research  compilations;   portfolio  analyses;
economic reports;  compilations of securities  prices,  earnings,  dividends and
other data;  computer  hardware and software,  quotation  equipment and services
used  for  research;  and  services  of  economic  or  other  consultants.   The
commissions  paid on such  transactions  may  exceed  the  amount of  commission
another  broker  would have charged for  effecting  that  transaction.  Research
products  and  services  made  available  to Liberty  Asset  Management  include
performance and other  qualitative and quantitative  data relating to investment
managers in general and the Portfolio  Managers in particular;  data relating to
the historic performance of categories of securities  associated with particular
investment styles;  mutual fund portfolio and performance data; data relating to
portfolio  manager  changes by pension plan  fiduciaries;  and related  computer
hardware and  software,  all of which are used by Liberty  Asset  Management  in
connection with its selection and monitoring of Portfolio Managers, the assembly
of an appropriate mix of investment  styles,  and the  determination  of overall
portfolio  strategies.  These research products and services may also be used by
Liberty Asset  Management in connection with its management of Liberty  All-Star
Growth  Fund,   Inc.,   Liberty  All-Star  Growth  and  Income  Fund  and  other
multi-managed  clients of Liberty Asset  Management.  In instances where Liberty
Asset  Management  receives  from or through  brokers  and  dealers  products or
services  which are used both for research  purposes and for  administrative  or
other non-research purposes,  Liberty Asset Management makes a good faith effort
to determine the relative  proportions of such products or services which may be
considered as investment  research,  based primarily on anticipated  usage,  and
pays for the costs attributable to the non-research usage in cash.

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

         Although the Fund does not permit a Portfolio  Manager to act or have a
broker-dealer  affiliate act as broker for Fund portfolio transactions initiated
by it, the Portfolio Managers are permitted to place Fund portfolio transactions
initiated by them with another Portfolio Manager or its broker-dealer  affiliate
for execution on an agency basis,  provided the  commission  does not exceed the
usual  and  customary  broker's  commission  being  paid to  other  brokers  for
comparable   transactions  and  is  otherwise  in  accordance  with  the  Fund's
procedures  adopted  pursuant to Rule 17e-1 under the  Investment  Company  Act.
During  1999,  there were Fund  portfolio  transactions  placed with a Portfolio
Manager or its affiliate.

The Fund has applied to the  Securities  and Exchange  Commission  for exemptive
relief from Sections 10(f),  17(a) and 17(e) and Rule 17e-1 under the Investment
Company  Act of 1940.  If  exemptive  relief  is  granted,  it will  permit  (1)
broker-dealers which are, or are affiliated with, Portfolio Managers of the Fund
to engage in principal transactions with and brokerage services to portion(s) of
the Fund  advised  by another  Portfolio  Manager  and (2) the Fund to  purchase
securities either directly from a principal  underwriter which is an affilate of
a  Portfolio  Manager or from an  underwriting  syndicate  of which a  principal
underwriter  is  affiliated  with  a  Portfolio  Manager  of  the  Fund.  It  is
anticipated  that the requested  relief could be granted by the  Securities  and
Exchange Commission during the period of time this proxy is pending.


<PAGE>
INFORMATION ABOUT THE MEETING

         All  proxies  solicited  by the Board of  Trustees  which are  properly
executed  and  returned in time to be voted at the Meeting  will be voted at the
Meeting in accordance with the instructions thereon. If no specification is made
on a proxy,  it will be voted FOR the election as Trustee of the nominees  named
under PROPOSAL 1, FOR approval of the Fund's portfolio management agreement with
TCW referred to under  PROPOSAL 2, FOR the new  Portfolio  Management  Agreement
with  Oppenheimer  Capital to be effective upon change in control of Oppenheimer
Capital  upon  acquisition  by Allianz AG referred to under  PROPOSAL 3, and FOR
ratification  of the Board's  selection of the Fund's  independent  auditors for
2000.  Any  proxy  may be  revoked  at any  time  prior  to its  use by  written
notification received by the Fund's Secretary, by the execution of a later-dated
proxy, or by attending the Meeting and voting in person.

         The  election of the  Trustees is by  plurality  vote.  Approval of the
portfolio  management  agreements with TCW and Oppenheimer  Capital each require
the affirmative vote of a "majority of the outstanding voting securities" of the
Fund,  as  defined  under  PROPOSAL  2 and  PROPOSAL  3-  Required  Vote  above.
Ratification of the selection of the Fund 's independent  auditors  requires the
affirmative vote of a majority of the shares voting thereon,  provided more than
50% of the  outstanding  shares are present or represented at the Meeting.  Only
shareholders of record may vote.

         Broker-dealer  firms  holding  Fund  shares  in  "street  name" for the
benefit of their  customers  and clients will request the  instructions  of such
customers  and clients on how to vote their shares on each  proposal  before the
Meeting.  The Fund  understands  that,  under  the  rules of the New York  Stock
Exchange,  if no instructions  have been received prior to the date specified in
such  broker-dealer  firm's request for voting  instructions,  the broker-dealer
firms may grant authority to the proxies  designated by the Fund to vote for the
election of the Trustees,  for approval of the portfolio  management  agreements
with TCW and Oppenheimer  Capital,  and for the ratification of the selection of
the Fund 's independent auditors.

         The shares as to which the Fund is granted  authority by  broker-dealer
firms  to vote on the  election  of  Trustees,  as well as  shares  as to  which
properly  executed  proxies  are  returned by the record  shareholders,  will be
counted as  represented  at the  Meeting.  Because of the effect of the New York
Stock  Exchange  rules  referred to above,  the failure of any Fund  shareholder
whose shares are held in "street name" by a broker-dealer firm to timely furnish
his or her  instructions  on how to vote  such  shares  on the  election  of the
Trustees,  the  approval  of the new  portfolio  management  agreements  and the
ratification of the selection of independent  auditors will have the same effect
as a vote for such proposals. An abstention on the approval of the new portfolio
management  agreements will have the same effect as vote against such proposals,
and the  withholding  of a vote on the election of the Trustees or an abstention
on the  ratification  of the  selection of auditors  will have no effect on such
proposals.

         All shareholders of record on February 1, 2000 are entitled to one vote
for each share held. As of that date 99,577,653 shares of beneficial interest of
the Fund were  issued and  outstanding.  Based on filings  made by such  holders
pursuant to Sections 13(d) and 16(a) of the Securities Exchange Act of 1934 (the
"Exchange  Act"),  the  following  entities  owned  beneficially  more than five
percent of the outstanding shares of the Fund:
                                                             Percent of
Name and Address                  No. of Shares Owned        Outstanding Shares

Liberty Mutual Insurance
  Company and Liberty Mutual
  Fire Insurance Company
175 Berkeley Street
Boston, MA  02117                 ___________shares           ______%

         Liberty Mutual Insurance Company ("Liberty  Mutual") and Liberty Mutual
Fire Insurance  Company  ("Liberty  Fire") have sole voting and investment power
with respect to _______ and __________ shares, respectively.  Liberty Mutual and
Liberty Fire are mutual insurance companies having identical Boards of Directors
and certain common executive officers. Liberty Mutual indirectly owns a majority
of the outstanding common stock of Liberty Financial,  which indirectly owns all
of the  stock  of  Liberty  Asset  Management  (see  MANAGEMENT  above).  To the
knowledge of the Fund,  on the record date for the Meeting no other  shareholder
owned  beneficially,  as defined by Rule 13d-3 under the Exchange Act, more than
5% of the outstanding shares of the Fund.

         In the event a quorum is present at the Meeting but sufficient votes to
approve any of the above proposals have not been received,  the persons named as
proxies may propose one or more  adjournments  of the Meeting to permit  further
solicitation of proxies.  A shareholder  vote may be taken on one or more of the
proposals  referred to above prior to such  adjournment if sufficient votes have
been received and it is otherwise appropriate. Any such adjournment will require
the  affirmative  vote of a majority of those  shares  present at the Meeting in
person or by proxy.  If a quorum is present,  the persons  named as proxies will
vote those  proxies  which they are  entitled  to vote FOR any such  proposal in
favor of such  adjournment and will vote those proxies  required to be voted for
rejection of such proposal against any such adjournment.

Section 16(a) Beneficial Ownership Reporting Compliance

         Section  16(a) of the  Exchange  Act  requires the Fund 's Trustees and
officers  and persons  who own more than ten  percent of the Fund's  outstanding
shares  and  certain   officers  and  directors  of  Liberty  Asset   Management
(collectively,  "Section 16 reporting persons"), to file with the Securities and
Exchange  Commission ("SEC") initial reports of ownership and reports of changes
in ownership of Fund  shares.  Section 16 reporting  persons are required by SEC
regulations  to furnish  the Fund with  copies of all  Section  16(a) forms they
file. To the Fund 's  knowledge,  based solely on a review of the copies of such
reports furnished to the Fund and on representations  that no other reports were
required,  during  the year  ended  December  31,  1999,  all other  Section  16
reporting persons complied with all Section 16(a) filing requirements applicable
to them.

<PAGE>
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS

         Under  the  proxy  rules of the  Securities  and  Exchange  Commission,
shareholder  proposals meeting tests contained in those rules may, under certain
conditions,  be included in the Fund 's proxy  material for a particular  annual
shareholders meeting.  Under the foregoing proxy rules,  proposals submitted for
inclusion in the proxy  material for the 2001 Annual Meeting must be received by
the Fund on or  before  October  26,  2000.  The fact that the Fund  receives  a
shareholder  proposal in a timely  manner does not ensure its  inclusion  in its
proxy material,  since there are other  requirements in the proxy rules relating
to such inclusion.

February 28, 2000


<PAGE>
                               APPENDIX A

         TCW Funds  Management,  Inc.  ("TCW")  is also a  Portfolio  Manager of
Liberty  All-Star Equity Fund,  Variable Series and Liberty  All-Star Growth and
Income Fund,  open-end  multi-managed  investment  companies  managed by Liberty
Asset Management Company that have the same investment  objectives and policies,
and the same Portfolio Managers, as Liberty All-Star Equity Fund. The net assets
of Liberty All-Star Equity Fund, Variable Series and Liberty All-Star Growth and
Income  Fund  as  of  December  31,  1999  were  $___________  and  $__________,
respectively.  TCW manages approximately one fifth of each fund's portfolio. TCW
receives from Liberty Asset Management a portfolio  management fee at the annual
rate of 0.30% of the daily average net asset value of the portion of each fund's
portfolio managed by it.



<PAGE>
                               APPENDIX B

                     PORTFOLIO MANAGEMENT AGREEMENT


                            November 1, 1999


TCW Funds Management, Inc.
865 South Figueroa Street
Los Angeles, CA 90017

         Re:      Portfolio Management Agreement

Ladies and Gentlemen:

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

                  C. It will adopt a written code of ethics  complying  with the
requirements of Rule l7j-l under the Act. Within 45 days of the end of each year
while  this  Agreement  is in  effect,  an  officer  or  general  partner of the
Portfolio  Manager  shall  certify to the Fund that the  Portfolio  Manager  has
complied with the  requirements  of Rule l7j-l during the previous year and that
there has been no  violation  of its code of ethics or, if such a violation  has
occurred, that appropriate action was taken in response to such violation.

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

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

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

         15. Effective Date; Term. This Agreement shall continue in effect until
October  31,  2001  and  shall  continue  in  effect  thereafter  provided  such
continuance is  specifically  approved at least annually by (i) the Fund's Board
of Trustees or (ii) a vote of a "majority" (as defined in the Act) of the Fund's
outstanding voting securities, provided that in either event such continuance is
also  approved by a majority of the Board of  Trustees  who are not  "interested
persons" (as defined in the Act) of any party to this Agreement, by vote cast in
person at a meeting  called  for the  purpose  of voting on such  approval,  and
provided  further that, in accordance the  conditions of the  application of the
Fund and the Fund Manager for an exemption  from 15(a) of the Act (Rel.  Nos. IC
19436 and 19491), the continuance of this Agreement shall be subject to approval
by the such "majority" vote of the Fund's  outstanding  voting securities at the
regularly  scheduled  annual meeting of  shareholders of the Fund next following
the date of this Agreement.  The aforesaid  requirement that continuance of this
Agreement be  "specifically  approved at least annually" shall be construed in a
manner consistent with the Act and the Rules and Regulations thereunder.

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

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

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


                                LIBERTY ALL-STAR EQUITY FUND


                                By:

                                LIBERTY ASSET MANAGEMENT COMPANY

                                By:






<PAGE>



ACCEPTED:

TCW FUNDS MANAGEMENT, INC.


By:
Title:


TCW FUNDS MANAGEMENT, INC.


By:
Title:

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


<PAGE>


                                       SCHEDULE C

                                 PORTFOLIO MANAGER FEE


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

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

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

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


<PAGE>


                            APPENDIX C


                    PORTFOLIO MANAGEMENT AGREEMENT


                                                     [DATE]



Oppenheimer Capital
1 World Financial Center
New York, NY 10281-1098

         Re:      Portfolio Management Agreement

Ladies and Gentlemen:

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

                  C. It will adopt a written code of ethics  complying  with the
requirements of Rule l7j-l under the Act. Within 45 days of the end of each year
while  this  Agreement  is in  effect,  an  officer  or  general  partner of the
Portfolio  Manager  shall  certify to the Fund that the  Portfolio  Manager  has
complied with the  requirements  of Rule l7j-l during the previous year and that
there has been no  violation  of its code of ethics or, if such a violation  has
occurred, that appropriate action was taken in response to such violation.

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

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

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

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

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

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

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

         19. Prior Agreement Superceded.  This Agreement supercedes and replaces
the Portfolio  Management  Agreement  dated among the Fund, the Fund Manager and
the Portfolio Manager.



                                 LIBERTY ALL-STAR EQUITY FUND


                                  By:
                                  Title:  Secretary

                                  LIBERTY ASSET MANAGEMENT COMPANY


                                  By:
                                  Title:  President and Chief Executive Officer

ACCEPTED:

Oppenheimer Capital


By:
Title:


Oppenheimer Capital


By:
Title:

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





<PAGE>
                                     SCHEDULE C

                                PORTFOLIO MANAGER FEE


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

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

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

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



<PAGE>


                                APPENDIX D
OpCap  Advisors,  a  subsidiary  of  Oppenheimer  Capital,  is  the  manager  or
sub-advisor  to  the  registered   investment   companies  listed  below.  These
investment companies have similar investment objectives to the Fund.

<TABLE>
<CAPTION>
                                         Approximate Net Assets (as of                 Advisory Fee Rate
                 Fund                    January XX, 2000)                     (based on average net asset value)
                 ----                    -----------------                     ----------------------------------

<S>                                      <C>                               <C>

Oppenheimer Quest Value                  $                                 1.0% on the first $400 million;
    Fund, Inc.                                                             .90% on the next $400 million;
Oppenheimer Quest                        $                                  .85% of net assets between $800 million
Opportunity Value Fund                                                     but less than $4 billion; and .80% on
                                                                           assets over $4 billion but less than $8
                                                                           billion and .75% on assets over $8
                                                                           billion.(1)

Oppenheimer Quest Capital                $                                 1.0% on the first $400 million; .90% on
     Value Fund, Inc.                                                      the next $400 million;
                                                                           .85% of the net assets in excess of $800
                                                                           million(2)

Enterprise Accumulation Trust:
     Equity Portfolio                    $                                 .40% of the first $1 billion;
     Managed Portfolio                   $                                 .30% on assets over $1 billion; and
                                                                           .25% for assets in excess of $2 billion(3)

Enterprise Group of Funds:
      Equity Portfolio                   $                                 .40% of the first $100 million;
      Managed Portfolio                  $                                 .30% on assets in excess of $100
                                                                           million(4)
Penn Series Funds, Inc.:
Value Equity Fund                        $                                 .50%(5)

Endeavor Series Trust:
   Value Equity Portfolio                $                                 .40%(6)
    Opportunity Value
    Portfolio

WNL Series Trust:
   Elite Value Asset
   Allocation Portfolio                  $                                 .40%(7)

The Saratoga Advantage Trust:
    Large Capitalization
    Value Portfolio                      $                                 .30%(7)

OCC Accumulation Trust:                                                    .80% of the first $400 million of average
    Equity Portfolio                     $                                 net assets: .75% of the next $400 million
    Managed Portfolio                    $                                 of average net assets and .70% of assets
                                                                           in excess of $800 million(8)

</TABLE>

(1)      With respect to each of these funds, Oppenheimer Funds, Inc. ("OFI") is
         the investment adviser and OpCap Advisors is the sub-adviser.  OFI pays
         OpCap  Advisors  monthly an annual fee based on the  average  daily net
         assets of the fund equal to 40% of the  advisory  fee  collected by OFI
         based on the total net assets of the fund as of November  22, 1995 (the
         "base amount") plus 30% of the investment advisory fee collected by OFI
         based on the total net assets of the fund that exceed the base amount.

(2)      OFI is the investment  advisor and OpCap  Advisors is the  sub-adviser.
         OFI pays  OpCap  Advisors  a  sub-advisory  fee equal to 40% of the net
         advisory  fee  calculated  by OFI for the fund  based on the  total net
         assets of the fund as of February 28, 1997 and remaining 120 days later
         (the "base amount") plus 30% of the  investment  advisory fee collected
         by OFI based on the total assets that exceed that base  amount.  OFI is
         waiving the  following  portion of its advisory  fee: .15% of the first
         $200  million  of  average  daily  net  assets,  .40% of the next  $200
         million,  .30% of the next $400  million and .25% of average net assets
         in excess of $800 million.

(3)      These  fees  are for  investment  advisory  services  only.  Management
         services  are  provided to the  portfolios  by a party other than OpCap
         Advisors.  The manager, which pays the investment advisory fee to OpCap
         Advisors,  receives a management  fee, on an annual basis,  of 0.80% of
         the first $400  million of the average  daily net  assets;  .75% on the
         next $400  million and .70% on assets above $800 million of each of the
         portfolios.

(4)      This fee is for investment advisory services only.  Management services
         are provided to the  portfolios  by a party other than OpCap  Advisors.
         The manager,  which pays the investment advisory fee to OpCap Advisors,
         receives a  management  fee of .75% of the average  daily net assets of
         the portfolios.

(5)      These fees are for investment  advisory  services only.  Administrative
         services  are  provided  to these  funds by a party  other  than  OpCap
         Advisors.  The funds  are each  charged  on an  annual  basis a fee for
         administrative  services of 0.15% of their respective average daily net
         assets.

(6)      This fee is for investment advisory services only.  Management services
         are provided to the  portfolios  by a party other than OpCap  Advisors.
         The manager,  which pays the investment advisory fee to OpCap Advisors,
         receives a  management  fee of .80% of average  daily net assets of the
         portfolios.

(7)      This fee is for investment advisory services only.  Management services
         are provided to the portfolio by a party other than OpCap Advisors. The
         manager,  which pays the  investment  advisory  fee to OpCap  Advisors,
         receives a management  fee of 0.65% of the average  daily net assets of
         the portfolio.

(8)     OpCap  Advisors  has  agreed to waive its  management  fee and
        reimburse Expenses so that the total operating  expenses (net of any
        expense offsets and excluding the amount of any interest, taxes,
        brokerage commissions and extraordinary expenses) of such portfolios
        do not exceed 1.00% of their respective average daily net assets.
<PAGE>

                       LIBERTY ALL-STAR EQUITY FUND                      PROXY

     PROXY SOLICITED BY THE BOARD OF DIRECTORS OF LIBERTY ALL-STAR EQUITY FUND

                  PROXY FOR 2000 ANNUAL MEETING OF SHAREHOLDERS

The undersigned, revoking previous proxies, hereby appoints Suzan M. Barron,
William J. Ballou, Nancy L. Conlin, Timothy J. Jacoby and William R.
Parmentier, Jr., or any one or more of them, attorneys, with power of
substitution, to vote all shares of Liberty All-Star Equity Fund (the
"Fund") which the undersigned is entitled to vote at the 2000 Annual Meeting
of the Fund to be held in Room AV-1, 3rd Floor, Federal Reserve Plaza, 600
Atlantic Avenue, Boston, Massachusetts on April 19, 2000 at 9:30 a.m. and
at any adjournments thereof.  All powers may be exercised by a majority of
said proxy holders or substitutes voting or acting or, if only one votes or
acts, then by that one.  The undersigned directs said proxy holders to vote as
specified upon the proposals shown below, each of which is described in the
proxy statement for the Meeting, receipt of which is acknowledged.

SAID PROXIES WILL VOTE THIS PROXY AS DIRECTED, OR IF NO DIRECTION IS INDICATED,
FOR THE NOMINEES LISTED IN IN PROPOSAL 1 UNLESS AUTHORITY TO DO SO IS
SPECIFICALLY WITHHELD IN THE MANNER PROVIDED, AND FOR PROPOSALS 2, 3 AND 4,
AND WILL USE THEIR DISCRETION WITH RESPECT TO ANY  MATTERS REFERRED TO IN
ITEM 5.

- ------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.  PLEASE DO NOT FOLD, STAPLE OR MUTILATE CARD.
- ------------------------------------------------------------------------------
<PAGE>

LIBERTY ALL-STAR EQUITY FUND
RECORD DATE SHARES:


<TABLE>
<CAPTION>

<S>                                                                               <C>          <C>             <C>


1. To elect two Trustees of the Fund.                                              FOR ALL
                                                                                   NOMINEES     WITHHOLD       FOR ALL EXCEPT
                                                                                   ---------    --------       ---------------
   Robert J. Birnbaum
   William E. Mayer


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


2. To approve or disapprove the Fund's Portfolio  Management Agreement with TCW
   Funds Management, Inc.                                                          FOR / /      AGAINST /  /   ABSTAIN /  /

3. To approve or  disapprove a new  Portfolio  Management  Agreement  with
   Oppenheimer Capital which will replace the current Portfolio Management
   Agreement  which will  terminate  upon change in control of Oppenheimer
   Capital upon acquisition by Allianz AG.                                         FOR / /      AGAINST /  /   ABSTAIN /  /

4. To   ratify   the    selection   by   the   Board   of   Trustees   of
   PricewaterhouseCoopers  LLP as the Fund's independent  auditors for the
   year ending December 31, 2000.                                                  FOR / /      AGAINST /  /   ABSTAIN /  /

5. In their discretion, upon such other business as may properly come before
   the Meeting.

                                                 ----------------
                                                    Date

Please sign exactly as your name(s) appear(s) above.
Corporate proxies should be signed by an authorized officer.

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


Shareholder sign here                                    Co-owner sign here
- ------------------------------------------------------------------------------

</TABLE>


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