UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Item 1.  Reports to Stockholders.

LIBERTY ALL-STAR^® GROWTH FUND

2007 ANNUAL REPORT

A SINGLE INVESTMENT …

A DIVERSIFIED GROWTH PORTFOLIO

A single fund that offers:

·    A diversified, multi-managed portfolio of small, mid- and large cap growth stocks

·    Exposure to many of the industries that make the U.S. economy one of the world’s most dynamic

·    Access to institutional quality investment managers

·    Objective and ongoing manager evaluation

·    Active portfolio rebalancing

·    A quarterly fixed distribution policy

·    Actively managed, exchange traded fund listed on the New York Stock Exchange (ticker symbol: ASG)

LIBERTY ALL-STAR GROWTH FUND, INC.

CONTENTS

1                             President’s Letter

4                             Closed-End Funds: What They Are and How They’re Different

5                             Editorial Feature: Unique Fund Attributes

7                             Investment Managers/Portfolio Characteristics

8                             Manager Roundtable

12                       Investment Growth

13                       Table of Distributions and Rights Offerings

14                       Top 20 Holdings and Economic Sectors

15                       Major Stock Changes in the Fourth Quarter

16                       Schedule of Investments

23                       Statement of Assets and Liabilities

24                       Statement of Operations

25                       Statement of Changes in Net Assets

26                       Financial Highlights

27                       Notes to Financial Statements

30                       Report of Independent Registered Public Accounting Firm

31                       Automatic Dividend Reinvestment and Cash Purchase Plan

32                       Tax Information

33                       Directors and Officers

36                       Privacy Policy

37                       Description of Lipper Benchmark and Market Indices

Inside Back Cover: Fund Information

The views expressed in the President’s Letter, Editorial Feature and Manager Roundtable reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions, and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for the Fund are based on numerous factors, may not be relied on as an indication of trading intent. References to specific company securities should not be construed as a recommendation or investment advice.

LIBERTY ALL-STAR^® GROWTH FUND

PRESIDENT’S LETTER

Two thousand seven was a rewarding year for growth stock investors. After many years that favored value stocks, the change in leadership that began building in 2006 culminated in a year when the growth style of investing outperformed value for the first time since 1999.

Reflective of this rotation, the Russell 3000^® Growth Index gained 11.4 percent for the year versus a 1.0 percent decline for the Russell 3000^® Value Index. The widely followed S&P 500 Index returned a respectable 5.5 percent in 2007, but it, too, was topped by the growth-oriented NASDAQ Composite Index, which advanced 10.7 percent for its best showing since 2003.

There are many reasons for the shift to growth stocks: Value stocks had run up over many years, and by some were no longer perceived as compelling a “value” as they once represented. Investors also anticipated that corporate spending on IT would lead to a good year for growth-oriented technology stocks and as corporate earnings slowed into the single-digit range, investors sought companies with better earnings visibility in a slowing economy.

Despite a weak fourth quarter, 2007 was the fifth consecutive year of positive stock market returns. But, as investors reading this report in early 2008 are all too well aware, the market is beset with problems ranging from the subprime mortgage crisis and a moribund residential real estate market, to high energy prices and deteriorating consumer confidence. In addition, ongoing geopolitical challenges that seem to have become a permanent part of the global situation remain a concern. Although we are hopeful that the stock market can work its way through its most serious concerns and regain its footing; it is difficult to believe that sentiment will remain as negative as it has been for the past couple of months. Still, after five good years we may be in for a period of consolidation, given the uncertainties that exist.

Liberty All-Star Growth Fund enjoyed a strong 2007, as it posted excellent returns in both absolute and relative terms. For the full year, the Fund returned 17.4 percent with shares valued at net asset value (NAV) and 17.9 percent with shares valued at NAV with dividends reinvested. In terms of the market price of its shares (with dividends reinvested), the Fund gained 23.5 percent. The Fund’s primary benchmark, the Lipper Multi-Cap Growth Mutual Fund Average, advanced 15.0 percent. Relative to all the funds in this benchmark, the Fund’s performance ranked in the top one-third.

The Fund’s NAV returns are above the Russell 3000^® Growth Index for the trailing three-, five- and seven-year periods. We are gratified that the discount at which Fund shares are priced relative to their underlying NAV narrowed to just 1.2 percent at year-end, given the trend of widening discounts for most closed-end funds during the second half of the year.

For the full year, the Fund benefited from good stock selection within the consumer discretionary and financial sectors. In particular, the higher quality orientation of the Fund was finally rewarded, as investors fled riskier assets after the fallout from the subprime credit crisis.

The accompanying table traces key metrics for the fourth quarter and full year of 2007, as well as longer-term periods.

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In terms of Fund news, the Board of Directors appointed Chase Investment Counsel Corporation as the Fund’s large-cap growth manager to replace William Blair & Company, L.L.C., effective January 2, 2008. Chase Investment Counsel is well known to ALPS Advisers, as the firm is one of the five investment managers for

*    Percentile ranks calculated using the Fund’s NAV Reinvested results within the Lipper Multi-Cap Growth Open-end Mutual Fund Universe.

Performance shown from the first full calendar year since restructure to a multi-cap growth fund. Figures shown for the Fund and the Lipper Multi-Cap Growth Mutual Fund Average are total returns, which include dividends, after deducting Fund expenses. The Fund’s performance is calculated assuming that a shareholder exercised all primary rights in the Fund’s rights offerings. Figures shown for the unmanaged NASDAQ Composite Index, the Russell 3000 Growth Index and the S&P 500 Index are total returns, including income. A description of the Lipper benchmark and the market indices can be found on page 37.

Past performance cannot predict future results. Performance will fluctuate with market conditions. Current performance may be lower or higher than the performance data shown. Performance information does not reflect the deduction of taxes that shareholders would pay on Fund distributions or the sale of Fund shares. An investment in the Fund involves risk, including loss of principal.

Shares of closed-end funds frequently trade at a discount to net asset value. The price of the Fund’s shares is determined by a number of factors, several of which are beyond the control of the Fund. Therefore, the Fund cannot predict whether its shares will trade at, below or above net asset value.

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the Liberty All-Star Equity Fund. Comments from David Scott, Chase’s Chief Investment Officer, are included in our annual Manager Roundtable, which begins on page 8 of this report.

We are gratified that the Fund performed well in 2007. After several years when growth stocks in general and quality growth stocks in particular took a back seat to their value counterparts, we recognize that shareholders’ patience was tested. At the same time, the worst decision we could have made during this trying period was to stray from the principles, objectives and underlying strategies of the Fund.

Two thousand seven ended weakly and that weakness accelerated into 2008. We do not know what the full year holds for the markets or the Fund specifically. However, we do believe that the Fund’s quality orientation and diversified multi-cap structure offer shareholders a reasonable way to navigate through these turbulent markets.

Be assured that we remain dedicated to shareholders’ best long-term interests and that we will continue to do all in our power to maintain your trust and confidence.

Sincerely,

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LIBERTY ALL-STAR^® GROWTH FUND

CLOSED-END FUNDS AND HOW THEY’RE DIFFERENT

Liberty All-Star Growth Fund is a closed-end fund, a characteristic that distinguishes it from most investment funds, which are open-end mutual funds. An open-end mutual fund creates or redeems shares continuously as money flows into or out of the fund. Closed-end funds, by contrast, have a fixed number of shares that are traded between investors on a stock exchange (the Fund is listed on the New York Stock Exchange but trades on other exchanges, as well).

Why does being a closed-end fund matter to investors? An exchange-traded, closed-end fund is bought and sold just like the shares of other publicly traded securities. Pricing is intra-day – not just end-of-day, as is the case with open-end mutual funds. A transaction price is continuously available and there are no annual sales fees. From the perspective of the Fund’s three investment managers, the closed-end structure allows them to focus on stock selection and investing for the long term instead of being influenced by sharp inflows or outflows of assets that can occur with open-end funds.

Closed-end funds may trade at a market price that represents a premium or discount to the underlying assets in the fund (the net asset value, or NAV). Why? The primary reason is actions in the market that determine the price of shares in general, such as supply and demand, investor sentiment, liquidity needs and other market forces.

While there are many more open-end mutual funds, closed-end funds still play a significant role in the financial markets. At present, there are some 650 closed-end funds representing about $300 billion in assets.

Unique Attributes of Liberty
All-Star Growth Fund

Liberty All-Star Growth Fund enhances the benefits of its status as a closed-end fund through key attributes highlighted on the following pages. Together, these attributes help to make the Fund a single growth equity holding for investors seeking diversification and the potential for long-term appreciation.

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LIBERTY ALL-STAR^® GROWTH FUND

UNIQUE FUND ATTRIBUTES

Multi-management for individual investors

Large institutional investors, such as endowments and pension plans, have traditionally employed multiple investment managers. Liberty All-Star Growth Fund brings multi-management to individual investors. With three investment managers, the Fund provides shareholders with exposure to the full capitalization range of growth style stocks – small, mid- and large.

Real-time trading and liquidity

Owing to its closed-end structure, the Fund has a fixed number of shares that trade on the New York Stock Exchange and other exchanges. Share price is determined by supply and demand, and pricing is continuous–not just end-of-day, as it is with open-end mutual funds. Fund shares offer immediate liquidity, there are no annual sales fees and expense ratios are lower than many comparable open-end mutual funds.

Access to institutional managers

The Fund’s investment managers invest primarily for pension funds, endowments, foundations and other institutions. By itself, that does not make them inherently better. But, because they are closely monitored by their institutional clients, these managers tend to be more disciplined and consistent in their investment process.

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Monitoring and rebalancing

ALPS Advisers continuously monitors the investment managers to ensure that they are performing as expected and adhering to their style and strategy. If warranted, ALPS will recommend that the Board of Directors replace a manager. Periodic rebalancing maintains the Fund’s structural integrity and is a well-recognized investment discipline.

Alignment and objectivity

Alignment with shareholders’ best interests and objective decision-making help to ensure that the Fund is managed openly and equitably. A series of checks and balances and the selection of unaffiliated investment managers ensure the integrity of this key principle. In addition, the Fund is governed by a Board of Directors that is elected by and responsible to shareholders.

Distribution policy

Since 1997, the Fund has followed a policy of paying annual distributions on its shares at a rate of 10 percent of the Fund’s net asset value (paid quarterly at 2.5 percent per quarter), providing a systematic mechanism for distributing funds to shareholders.

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LIBERTY ALL-STAR^® GROWTH FUND

INVESTMENT MANAGERS/PORTFOILIO CHARACTERISTICS

THE FUND’S THREE GROWTH INVESTMENT MANAGERS AND THE MARKET CAPITALIZATION ON WHICH EACH FOCUSES:

MANAGERS’ DIFFERING INVESTMENT STRATEGIES ARE REFLECTED IN PORTFOLIO CHARACTERISTICS

The portfolio characteristics table below is a regular feature of the Fund’s shareholder reports. It serves as a useful tool for understanding the value of the Fund’s multi-managed portfolio. The characteristics are different for each of the Fund’s three investment managers. These differences are a reflection of the fact that each has a different capitalization focus and investment strategy. The shaded column highlights the characteristics of the Fund as a whole, while the first three columns show portfolio characteristics for the Russell Smallcap, Midcap and Largecap Growth indices. See page 37 for a description of these indices.

*                            Chase Investment Counsel Corporation replaced William Blair & Company, L.L.C. effective January 2, 2008.

**                     Certain holdings are held by more than one manager.

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LIBERTY ALL-STAR^® GROWTH FUND

MANAGER ROUNDTABLE

The Fund’s investment managers continue their quest for stocks with the potential to overcome volatility and a slower economy

Most growth indices posted sound returns in 2007: The Russell 3000 growth Index was up 11.4 percent and the NASDAQ Composite Index was ahead 10.7 percent. Even better, three- and five-year returns for these indices were strong as well. But, as 2007 closed, heightened risk and uncertainty were in the air. In the fourth quarter of the year, the Russell 3000 Growth Index declined 0.9 percent, while the NASDAQ Composite eased 1.6 percent. What does this mean? End of the bull market run? A correction? Merely a pause? The fund’s three investment managers tackle these questions in this year’s Manager Roundtable. Markets will always be uncertain. But, what is certain is that they continue to implement their bottom-up growth investing disciplines and search for high quality, high growth companies. AlPS Advisers serves as moderator of the Roundtable. The participating investment managers and their capitalization focus are:

M. A. WEATHERBIE & COMPANY, INC.

Portfolio Manager/Matthew A. Weatherbie, CFA
President and Founder

Capitalization Focus/Small-Cap Growth – M.A. Weatherbie practices a small capitalization growth investment style focusing on high quality companies that demonstrate superior earnings growth prospects, yet are reasonably priced relative to their intrinsic value. The firm seeks to provide superior returns relative to small capitalization growth indices over a full market cycle.

TCW INVESTMENT MANAGEMENT COMPANY

Portfolio Manager/Brendt Stallings, CFA
Managing Director

Capitalization Focus/Mid-Cap Growth – TCW seeks capital appreciation through investment in the securities of rapidly growing companies whose business prospects, in TCW’s view, are not properly perceived by consensus research.

CHASE INVESTMENT COUNSEL CORPORATION*

Portfolio Manager/David Scott, CFA, CIC
Senior Vice President and Chief Investment Officer

Capitalization Focus/Large-Cap Growth – Chase is a growth manager that has a valuation orientation to its investment process, seeking to invest in quality growth stocks that demonstrate consistent earnings growth but whose shares are reasonably priced.

For what kinds of stocks (i.e., sectors, industries) do you have favorable expectations in 2008 and why? Let’s go up the capitalization range from small to large. Matt Weatherbie, start us off, please.

WEATHERBIE (M.A. WEATHERBIE – SMALL-CAP GROWTH):

In a U.S. economy that is clearly slowing we would have favorable expectations for companies not directly dependent on consumer spending, i.e., health care, business services and technology companies. Our companies, while not recession proof, are recession resilient and can grow even in a weak

“With all the bad headlines, it’s easy to forget that corporate America is unusually healthy – excluding financials and perennial trouble spots like autos – and that balance sheets remain strong.”

Brendt Stallings,
TCW

* Replaced William Blair & Company, L.L.C., effective January 2, 2008.

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economy through new product introductions and market share gains that are derived from the superiority of their business models.

STALLINGS (TCW – MID-CAP GROWTH): We continue to prefer high-growth companies with secular, rather than cyclical growth drivers and strong balance sheets. Technology is an area we think will benefit from continued global growth and infrastructure build-out as well as the demand for better, faster, cheaper devices and components. Technology will likely continue to maintain its lead as the most dynamic sector in the market and continue to exhibit high return on investment for the foreseeable future. Energy is also a sector we view favorably, primarily due to increased incremental demand from developing countries, increased depletion rates and oil production difficulties.

SCOTT (CHASE – LARGE-CAP GROWTH): Among large cap strategies, value led the market entering 2007. We believe that trend ended by mid-year and growth took over leadership and will continue to perform better. The catalyst behind the style shift was the first signs of economic weakness in housing combined with a six year plus bull market in value stocks which led to over ownership. We believe we captured this change as a result of our investment process. Currently, we favor the consumer staples and health care sectors, which score favorably under the same process. Household products, beverages and medical services are well positioned for above-average earnings growth and are reasonably priced.

“Three top-down macro factors seem particularly important to the stock market outlook in 2008…the direction of interest rate changes…the direction of commodity prices… and the resolution of the debt crisis.”

David Scott,
Chase Investment Counsel

How does a growth manager look at 2008 in general given that growth is slowing if not turning negative… i.e., we’re referring to inflation/stagflation concerns, recession fears, lower corporate profitability. David Scott, let’s stay with you.

SCOTT (CHASE – LARGE-CAP GROWTH): As a growth manager, Chase Investment Counsel Corporation views the general environment in 2008 as very difficult to analyze based on the numerous cross currents mentioned. We believe it is imperative to focus on our investment stock selection process in making buy and sell decisions. Our approach is designed to build a portfolio of strong fundamental and technically sound, consistent earnings growers. We believe this approach should result in a higher probability of finding good performers and avoiding disasters.

Brendt Stallings, what are you focused on at TCW?

STALLINGS (TCW – MID-CAP GROWTH): While the range of outcomes a slowdown would have on growth stocks is impossible to handicap, it is on our minds as we search for new ideas. Stagflation is probably the worst-case scenario for us as it limits the abilities of policymakers to reduce the duration and impact of a downturn. However, our focus is on buying secular growth companies – companies likely to grow irrespective of the economic backdrop. Profitability and growth rates will be impacted by a tough environment, but the magnitude of the change should be far smaller for secular growers versus companies relying on cyclical expansion.

Matt Weatherbie, what’s a small cap growth manager’s perspective?

WEATHERBIE (M.A. WEATHERBIE – SMALL-CAP GROWTH): We look at the stock market being choppy and anxious near term as investors collectively try to determine how serious the economic slowdown will be. Inflation is not a concern (the after-inflation yield on 10-year Treasuries has declined from 2.8 percent in August to 1.6 percent today). So, the Federal Reserve should feel free to act swiftly and decisively to lower short term interest rates further. In addition, Congress and President Bush are looking at fiscal policy options to stimulate the economy. These actions will ultimately be positive for the stock market. In the meantime, as bottom-up stock pickers we are focusing on the highest

“The Federal Reserve should feel free to act swiftly and decisively to lower shortterm interest rates further. In addition, congress and President bush are looking at fiscal policy options to stimulate the economy.”

Matt Weatherbie,
M.A. Weatherbie

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quality investments. We also have low direct exposure to consumer spending.

In general, investment managers for Liberty All-Star Growth Fund take a bottom-up approach to buying stocks. But, top-down macro factors play a role, too. Given the worries that beset the market as 2007 went on – chiefly, the subprime mortgage situation, high oil prices, the weak dollar and inflation fears – what macro factors (both positive and negative) are you keeping your eye on for 2008? Brendt Stallings, lead off, please.

STALLINGS (TCW – MID-CAP GROWTH): The U.S. economy looks increasingly shaky. The Fed seems somewhat boxed-in, with persistent inflation limiting its freedom to aggressively cut rates and inject liquidity. It remains to be seen whether emerging economies can continue growing amidst U.S. weakness. With all the bad headlines, it’s easy to forget that corporate America is unusually healthy – excluding financials and perennial trouble spots like autos – and that balance sheets remain strong. The big risk is to earnings. The bad news in financial stock earnings is well known. More uncertain is whether non-financial earnings will follow the same path down.

WEATHERBIE (M.A. WEATHERBIE – SMALL-CAP GROWTH): The most important macro factors are the policy responses, both monetary and fiscal, on the part of the U.S. government to the weakening economy. The magnitude and timing of such actions will determine whether they are positive or negative. The second macro factor is the 2008 elections and whether Democratic majorities in both the House and Senate along with a Democratic president could raise taxes on dividends and capital gains, a clear negative for the market.

“For us, volatility can be positive, as it creates more of a ‘stockpickers’ environment. We take advantage of market volatility in order to ‘upgrade’ the portfolio…”

Brendt Stallings,
TCW

SCOTT (CHASE – LARGE-CAP GROWTH): Three topdown macro factors seem particularly important to the stock market outlook in 2008. First, the direction of interest rate changes as directed by Federal Reserve policy will be very important. In the near term short interest rates should move lower given the current economic weakness. This should be positive for stock prices. Second, the direction of change in commodity prices will be important. If commodity prices continue to ease, world monetary authorities will have more latitude in lowering interest rates. However, many of the more attractive stocks in our work suggest that commodity prices will hold or even rise. If this analysis proves correct it could hamper monetary policies. Third, the resolution of the debt crisis will dominate the outlook for the financial sector of the stock market. Since the financial sector is a relatively large weighting in many of the most widely followed indices, such as the S&P 500, its performance will significantly influence overall returns.

“We view high volatility as a negative for stock prices. It increases the equity risk premium with all other factors held constant. However, it does provide opportunity for our stock selection process.”

David Scott,
Chase Investment Counsel

As a way of informing the individual shareholder, how does your firm respond to the heightened volatility that we saw in 2007 – volatility that became extreme in the second half of the year? It is unnerving to individuals. So, from a professional’s perspective 1) what is your overall philosophy about high volatility; and 2) how do you generally “play it” – do nothing, hunker down, see it as an opportunity or take it on a case-by-case basis? Matt Weatherbie, what approach do you take?

WEATHERBIE (M.A. WEATHERBIE – SMALL-CAP GROWTH): Our overall philosophy about high volatility is that it is an unpleasant fact of life in today’s financial markets. We do not have a general game plan to “play it,” as our clients expect us to be fully invested. We do try to take advantage of volatility on an individual stock basis by trimming positions that have run up a lot and adding to positions that are weak for no fundamental reason.

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How does TCW approach it, Brendt Stallings?

STALLINGS (TCW – MID-CAP GROWTH): For us, volatility can be positive, as it creates more of a “stockpickers” environment. We take advantage of market volatility in order to “upgrade” the portfolio by buying names we have been following but didn’t have the opportunity to purchase. While volatility levels rose in 2007 and many of the more successful strategies of recent years (such as leveraged fixed income and quantitative equity strategies) struggled, successful traditional stock selection could steer an investor clear of the most troubled areas of the market by uncovering investments that could perform well despite market turmoil.

David Scott, share Chase’s thinking, please.

SCOTT (CHASE – LARGE-CAP GROWTH): We view high volatility as a negative for stock prices. It increases the equity risk premium with all other factors held constant. However, it does provide opportunity for our stock selection process. We can benefit from exaggerated short term movements to buy or sell stocks at more favorable prices. We can also assess the changing volatility of individual issues to reevaluate their attractiveness. In 2007, volatility played a key role in reducing our exposure to financial stocks and increasing our exposure to multinational mega-caps.

“We do try to take advantage of volatility on an individual stock basis by trimming positions that have run up a lot and adding to positions that are weak for no fundamental reason.”

Matt Weatherbie,
M.A. Weatherbie

Very interesting, and different views on volatility. To conclude, please tell us about a stock that you have added recently to the portion of the Liberty All-Star Growth Fund portfolio that you manage and your rationale for buying it.

SCOTT (CHASE – LARGE-CAP GROWTH): We recently purchased Genzyme Corp. for our clients. Genzyme was founded in 1981. Based in Cambridge Massachusetts, the company is a biotechnology conglomerate. Bolstering its strong long term growth record, the company has reported six consecutive positive earnings surprises; has a strong technical profile as evidenced by rising relative stock price strength; and is still reasonably priced. Fundamentally, the company has several catalysts in place to continue its good performance, including a strong drug pipeline, the recent approval of Synvise One for orthopedic applications and numerous cost cutting opportunities to bolster earnings.

STALLINGS (TCW – MID-CAP GROWTH): A recent addition is Bankrate, which is a leading online consumer site dedicated to financial information. We purchased Bankrate because we believe the stock does not discount the free cash flow potential of the business. Specifically, our research leads us to believe the company has significant opportunities to raise prices with little incremental cost, significantly expanding margins and increasing distributable free cash flow. Additionally, if falling interest rates and the wave of adjustable-rate- mortgage resets in the U.S. leads to a wave of mortgage refinancing, Bankrate will be a beneficiary.

WEATHERBIE (M.A. WEATHERBIE – SMALL-CAP GROWTH): SRA International is a leading provider of technology and strategic consulting solutions, primarily for the federal government. We had owned this stock previously but sold it when it appeared their growth would slow because U.S. government resources were being diverted to the war in Iraq. We are now in the early stages of the reversal of that process and funds will again flow to much needed technology upgrades across many federal government departments and agencies. SRA with a dynamic and accomplished new CEO, and an excellent corporate reputation, is poised to show accelerating revenue and earnings growth.

As always, many thanks for the comments and analysis. We hope shareholders find your insights helpful and enlightening.

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LIBERTY ALL-STAR^® GROWTH FUND

INVESTMENT GROWTH

GROWTH OF A $10,000 INVESTMENT

The graph below illustrates the growth of a $10,000 investment assuming the purchase of shares of common stock at the closing market price (NYSE: ASG) of $9.25 on December 31, 1996, and tracking its progress through December 31, 2007. For certain information, it also assumes that a shareholder exercised all primary rights in the Fund’s rights offerings (see below). This graph covers the period since the Fund commenced its 10 percent distribution policy in 1997.

Past performance cannot predict future results. Performance will fluctuate with changes in market conditions. Current performance may be lower or higher than the performance data shown. Performance information does not reflect the deduction of taxes that shareholders would pay on Fund distributions or the sale of Fund shares. An investment in the Fund involves risk, including loss of principal.

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LIBERTY ALL-STAR^® GROWTH FUND

TABLE OF DISTRIBUTIONS AND RIGHTS OFFERINGS

*            The number of shares offered was increased by an additional 25% to cover a portion of the over-subscription requests.

DISTRIBUTION POLICY

Liberty All-Star Growth Fund, Inc.’s current policy, in effect since 1997, is to pay distributions on its shares totaling approximately 10 percent of its net asset value per year, payable in four quarterly installments of 2.5 percent of the Fund’s net asset value at the close of the New York Stock Exchange on the Friday prior to each quarterly declaration date. The fixed distributions are not related to the amount of the Fund’s net investment income or net realized capital gains or losses and may be taxed as ordinary income up to the amount of the Fund’s current and accumulated earnings and profits. If, for any calendar year, the total distributions made under the 10 percent pay-out policy exceed the Fund’s net investment income and net realized capital gains, the excess will generally be treated as a non-taxable return of capital, reducing the shareholder’s adjusted basis in his or her shares. If the Fund’s net investment income and net realized capital gains for any year exceed the amount distributed under the 10 percent pay-out policy, the Fund may, in its discretion, retain and not distribute net realized capital gains and pay income tax thereon to the extent of such excess.

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LIBERTY ALL-STAR^® GROWTH FUND

TOP 20 HOLDINGS AND ECONOMIC SECTORS

*            Because the Fund is actively managed, there can be no guarantee that the Fund will continue to hold securities of the indicated issuers and sectors in the future.

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LIBERTY ALL-STAR^® GROWTH FUND

MAJOR STOCK CHANGES IN THE FOURTH QUARTER

The following are the major ($750,000 or more) stock changes—both purchases and sales—that were made in the Fund’s portfolio during the fourth quarter of 2007.

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LIBERTY ALL-STAR^® GROWTH FUND

SCHEDULE OF INVESTMENTS

as of December 31, 2007

See Notes to Schedule of Investments and Financial Statements

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See Notes to Schedule of Investments and Financial Statements

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See Notes to Schedule of Inverstments and Financial Statements

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