UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-04537

LIBERTY ALL-STAR GROWTH FUND, INC.

(Exact name of registrant as specified in charter)

1290 Broadway, Suite 1100, Denver, Colorado 80203

(Address of principal executive offices) (Zip code)

Erin D. Nelson, Esq.

ALPS Fund Services, Inc.

1290 Broadway, Suite 1100

Denver, Colorado 80203

(Name and address of agent for service)

Registrant’s telephone number, including area code: (303) 623-2577

Date of fiscal year end: December 31

Date of reporting period: January 1 – March 31, 2014

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Item 1 – Schedule of Investments.

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		SHARES				MARKET VALUE
COMMON STOCKS (96.57%)
CONSUMER DISCRETIONARY (15.35%)
Auto Components (1.08%)
BorgWarner, Inc.			13,800			$	848,286
Dorman Products, Inc.(a)			10,732				633,832
							1,482,118
Diversified Consumer Services (0.30%)
Ascent Capital Group, Inc., Class A(a)			5,432				410,388
Hotels, Restaurants & Leisure (3.33%)
Arcos Dorados Holdings, Inc., Class A			75,150				757,512
Chuy’s Holdings, Inc.(a)			13,643				588,559
Hilton Worldwide Holdings, Inc.(a)			30,175				671,092
Starbucks Corp.			23,585				1,730,667
Wynn Resorts Ltd.			3,800				844,170
							4,592,000
Internet & Catalog Retail (3.25%)
Amazon.com, Inc.(a)			6,120				2,059,502
priceline.com, Inc.(a)			1,395				1,662,687
RetailMeNot, Inc.(a)			23,456				750,592
							4,472,781
Leisure Equipment & Products (0.95%)
Black Diamond, Inc.(a)			28,380				347,087
Polaris Industries, Inc.			6,900				963,999
							1,311,086
Media (0.55%)
Discovery Communications, Inc., Class A(a)			9,200				760,840
Specialty Retail (3.13%)
CarMax, Inc.(a)			8,150				381,420
Dick’s Sporting Goods, Inc.			15,950				871,030
DSW, Inc., Class A			20,700				742,302
Francesca’s Holdings Corp.(a)			62,989				1,142,620
Tiffany & Co.			13,555				1,167,763
							4,305,135
Textiles, Apparel & Luxury Goods (2.76%)
Deckers Outdoor Corp.(a)			18,817				1,500,280
Kate Spade & Co.(a)			26,000				964,340
Under Armour, Inc., Class A(a)			11,600				1,329,824
							3,794,444
CONSUMER STAPLES (5.49%)
Beverages (1.77%)
The Boston Beer Co. Inc., Class A(a)			2,700				660,771
Constellation Brands, Inc., Class A(a)			8,500				722,245
Monster Beverage Corp.(a)			15,200				1,055,640
							2,438,656
Food & Staples Retailing (2.00%)
Costco Wholesale Corp.			8,705				972,175
The Fresh Market, Inc.(a)			18,047				606,379
PriceSmart, Inc.			7,154				722,053
Whole Foods Market, Inc.			8,865				449,544
							2,750,151
Food Products (1.72%)
The Hain Celestial Group, Inc.(a)			13,450				1,230,272
Mead Johnson Nutrition Co.			13,630				1,133,198
							2,363,470

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		SHARES				MARKET VALUE
COMMON STOCKS (continued)
ENERGY (6.67%)
Energy Equipment & Services (6.44%)
Core Laboratories N.V.			7,506			$	1,489,491
Dril-Quip, Inc.(a)			24,880				2,789,048
Frank’s International N.V.			15,530				384,833
Geospace Technologies Corp.(a)			11,853				784,313
Oceaneering International, Inc.			21,435				1,540,319
Schlumberger Ltd.			19,300				1,881,750
							8,869,754
Oil, Gas & Consumable Fuels (0.23%)
RSP Permian, Inc.(a)			11,100				320,679
FINANCIALS (13.92%)
Capital Markets (3.82%)
The Charles Schwab Corp.			33,550				916,922
Evercore Partners, Inc.			12,466				688,746
Financial Engines, Inc.			14,044				713,154
FXCM, Inc., Class A			34,050				502,919
T. Rowe Price Group, Inc.			12,400				1,021,140
Virtus Investment Partners, Inc.(a)			8,183				1,417,050
							5,259,931
Commercial Banks (1.75%)
Signature Bank(a)			19,213				2,412,961
Consumer Finance (1.81%)
Santander Consumer USA Holdings, Inc.(a)			26,800				645,344
Visa, Inc., Class A			8,515				1,838,048
							2,483,392
Diversified Financial Services (0.59%)
MarketAxess Holdings, Inc.			11,500				681,030
Portfolio Recovery Associates, Inc.(a)			2,340				135,392
							816,422
Insurance (2.51%)
ACE Ltd.			16,500				1,634,490
Greenlight Capital Re Ltd., Class A(a)			41,379				1,357,231
Third Point Reinsurance Ltd.(a)			29,243				463,502
							3,455,223
Real Estate Investment Trusts (1.37%)
American Tower Corp.			23,050				1,887,103
Real Estate Management & Development (0.91%)
FirstService Corp.			20,582				977,851
Zillow, Inc., Class A(a)			3,174				279,629
							1,257,480
Thrifts & Mortgage Finance (1.16%)
BofI Holding, Inc.(a)			18,545				1,590,234
HEALTH CARE (12.73%)
Biotechnology (3.11%)
BioMarin Pharmaceutical, Inc.(a)			23,905				1,630,560
Celgene Corp.(a)			8,375				1,169,150
Intercept Pharmaceuticals, Inc.(a)			950				313,300
Puma Biotechnology, Inc.(a)			11,284				1,175,116
							4,288,126

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		SHARES				MARKET VALUE
COMMON STOCKS (continued)
Health Care Equipment & Supplies (2.62%)
Insulet Corp.(a)			35,239			$	1,671,033
Intuitive Surgical, Inc.(a)			3,200				1,401,568
Masimo Corp.(a)			19,526				533,255
							3,605,856
Health Care Providers & Services (1.52%)
ExamWorks Group, Inc.(a)			40,981				1,434,745
MWI Veterinary Supply, Inc.(a)			1,552				241,522
Premier, Inc., Class A(a)			12,710				418,795
							2,095,062
Health Care Technology (3.69%)
athenahealth, Inc.(a)			14,248				2,283,100
Cerner Corp.(a)			49,630				2,791,687
							5,074,787
Life Sciences Tools & Services (0.89%)
Illumina, Inc.(a)			8,250				1,226,445
Pharmaceuticals (0.90%)
Allergan, Inc.			9,990				1,239,759
INDUSTRIALS (15.85%)
Aerospace & Defense (2.25%)
B/E Aerospace, Inc.(a)			10,800				937,332
HEICO Corp.			7,135				429,242
Precision Castparts Corp.			6,850				1,731,406
							3,097,980
Air Freight & Logistics (0.45%)
XPO Logistics, Inc.(a)			21,133				621,522
Commercial Services & Supplies (2.13%)
The Advisory Board Co.(a)			18,572				1,193,251
Waste Connections, Inc.			39,776				1,744,575
							2,937,826
Electrical Equipment (0.87%)
AMETEK, Inc.			9,500				489,155
Rockwell Automation, Inc.			5,700				709,935
							1,199,090
Machinery (4.67%)
Cummins, Inc.			6,350				946,086
Graco, Inc.			19,228				1,437,101
Middleby Corp.(a)			5,481				1,448,135
Proto Labs, Inc.(a)			1,873				126,746
Rexnord Corp.(a)			20,756				601,509
WABCO Holdings, Inc.(a)			10,050				1,060,878
Wabtec Corp.			10,450				809,875
							6,430,330
Professional Services (3.48%)
Huron Consulting Group, Inc.(a)			9,080				575,490
IHS, Inc., Class A(a)			13,527				1,643,531
Paylocity Holding Corp.(a)			14,522				349,254
Stantec, Inc.			7,668				468,361
TriNet Group, Inc.(a)			9,263				197,395
Verisk Analytics, Inc., Class A(a)			18,400				1,103,264
WageWorks, Inc.(a)			8,060				452,247
							4,789,542

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		SHARES				MARKET VALUE
COMMON STOCKS (continued)
Road & Rail (0.74%)
Kansas City Southern			5,550			$	566,433
Landstar System, Inc.			7,515				445,038
							1,011,471
Trading Companies & Distributors (1.26%)
Fastenal Co.			19,270				950,396
MSC Industrial Direct Co., Inc., Class A			9,100				787,332
							1,737,728
INFORMATION TECHNOLOGY (25.11%)
Communications Equipment (1.88%)
InterDigital, Inc.			12,247				405,498
QUALCOMM, Inc.			19,520				1,539,347
ViaSat, Inc.(a)			9,350				645,524
							2,590,369
Electronic Equipment & Instruments (1.38%)
FARO Technologies, Inc.(a)			8,642				458,026
FEI Co.			7,800				803,556
IPG Photonics Corp.(a)			9,096				646,544
							1,908,126
Internet Software & Services (7.66%)
Envestnet, Inc.(a)			36,248				1,456,445
Equinix, Inc.(a)			7,135				1,318,833
Google, Inc., Class A(a)			2,078				2,315,952
LinkedIn Corp., Class A(a)			10,845				2,005,674
Liquidity Services, Inc.(a)			37,641				980,548
SPS Commerce, Inc.(a)			10,118				621,751
Stamps.com, Inc.(a)			17,182				576,628
Textura Corp.(a)			15,368				387,427
Twitter, Inc.(a)			18,950				884,397
							10,547,655
IT Services (1.34%)
ServiceSource International, Inc.(a)			39,211				330,941
VeriFone Systems, Inc.(a)			44,607				1,508,608
							1,839,549
Semiconductors & Semiconductor Equipment (1.98%)
ARM Holdings PLC(b)			40,522				2,065,406
NVIDIA Corp.			36,950				661,775
							2,727,181
Software (10.87%)
ANSYS, Inc.(a)			12,300				947,346
Concur Technologies, Inc.(a)			4,648				460,478
FireEye, Inc.(a)			9,200				566,444
FleetMatics Group PLC(a)			20,785				695,258
RealPage, Inc.(a)			42,831				777,811
Salesforce.com, Inc.(a)			39,370				2,247,633
ServiceNow, Inc.(a)			22,250				1,333,220
Solera Holdings, Inc.			20,974				1,328,493
Splunk, Inc.(a)			32,117				2,296,044
The Ultimate Software Group, Inc.(a)			13,470				1,845,390
Varonis Systems, Inc.(a)			5,592				199,970
VMware, Inc., Class A(a)			11,050				1,193,621
Workday, Inc., Class A(a)			11,750				1,074,303
							14,966,011
MATERIALS (1.13%)
Metals & Mining (1.13%)
Allegheny Technologies, Inc.			28,750				1,083,300

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		SHARES				MARKET VALUE
COMMON STOCKS (continued)
Metals & Mining (continued)
Silver Wheaton Corp.			21,005			$	476,814
							1,560,114
TELECOMMUNICATION SERVICES (0.32%)
Diversified Telecommunication (0.32%)
inContact, Inc.(a)			45,737				439,075
TOTAL COMMON STOCKS
(COST OF $90,455,180)							132,967,852
		PAR VALUE
SHORT TERM INVESTMENT (2.08%)
REPURCHASE AGREEMENT (2.08%)
Repurchase agreement with State Street Bank & Trust Co., dated 3/31/14, due 04/01/14 at 0.01%, collateralized by Federal Home Loan Mortgage Corp., 3.00%, 03/15/43, market value of $2,935,899 and par value of $3,245,000. (Repurchase proceeds of $2,866,001).
(COST OF $2,866,000)		$	2,866,000			$	2,866,000
TOTAL INVESTMENTS (98.65%)
(COST OF $93,321,180)(c)							135,833,852
OTHER ASSETS IN EXCESS OF LIABILITIES (1.35%)							1,862,264
NET ASSETS (100.00%)						$	137,696,116
NET ASSET VALUE PER SHARE
(23,837,914 SHARES OUTSTANDING)						$	5.78

 

(a)	Non-income producing security.

(b)	American Depositary Receipt.

(c)	Cost of investments for federal income tax purposes is $93,787,137.

Gross unrealized appreciation and depreciation at March 31, 2014 based on cost of investments for federal income tax purposes is as follows:

 

Gross unrealized appreciation		$	44,525,392
Gross unrealized depreciation			(2,478,677)
Net unrealized appreciation		$	42,046,715

For Fund compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease. Industries are shown as a percent of net assets.

See Notes to Schedule of Investments.

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LIBERTY ALL STAR® GROWTH FUND		Notes to Schedule of Investments
		March 31, 2014 (unaudited)

Security Valuation

Equity securities including common stocks and exchange traded funds are valued at the last sale price at the close of the principal exchange on which they trade, except for securities listed on the NASDAQ Stock Market LLC (“NASDAQ”), which are valued at the NASDAQ official closing price. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets.

Short-term debt obligations maturing in more than 60 days for which market quotations are readily available are valued at current market value. Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value.

Repurchase agreements are valued at cost, which approximates fair value. Investments for which market quotations are not readily available are valued at fair value as determined in good faith under consistently applied procedures approved by and under the general supervision of the Fund’s Board of Directors.

Foreign Securities

The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible devaluation of currencies, the inability to repatriate foreign currency, less complete financial information about companies and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers. For the period ended March 31, 2014, the Fund only held American Depositary Receipts and did not hold any securities denominated in foreign currencies.

Security Transactions

Security transactions are recorded on trade date. Cost is determined and gains/ (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.

Repurchase Agreements

The Fund engages in repurchase agreement transactions with institutions that the Fund’s investment advisor has determined are creditworthy. The Fund, through its custodian, receives delivery of underlying securities collateralizing a repurchase agreement, including interest. Collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays or restrictions upon a Fund’s ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights. These collateral agreements mitigate the counterparty credit risk by providing for a single net settlement with a counterparty of all financial transactions covered by the agreement in an event of default as defined under such agreement.

Repurchase agreements are entered into by the Fund under a Master Repurchase Agreement (“MRA”) which permits the Fund, under certain circumstances, including an event of default (such as bankruptcy or insolvency), to offset payables and/or receivables under the MRA with collateral held and/or posted to the counterparty and create one single net payment due or from the Fund.

Income Recognition

Interest income is recorded on the accrual basis. Premiums and discounts are amortized and accreted, respectively, on all debt securities. Corporate actions and dividend income are recorded on the ex-date.

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The Fund estimates components of distributions from real estate investment trusts (“REITs”). Distributions received in excess of income are recorded as a reduction of the cost of the related investments. Once the REIT reports annually the tax character of its distributions, the Fund revises its estimates. If the Fund no longer owns the applicable securities, any distributions received in excess of income are recorded as realized gains.

Fair Value Measurements

The Fund discloses the classification of its fair value measurements following a three-tier hierarchy based on the inputs used to measure fair value. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.

Valuation techniques used to value the Fund’s investments by major category are as follows:

Equity securities and exchange-traded funds, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the mean of the most recent quoted bid and ask prices on such day and are generally categorized as Level 2 in the hierarchy. Repurchase agreements are valued at cost, which approximates fair value, and are categorized as Level 2 in the hierarchy.

Various inputs are used in determining the value of the Fund’s investments as of the end of the reporting period. When inputs used fall into different levels of the fair value hierarchy, the level in the hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments.

These inputs are categorized in the following hierarchy under applicable financial accounting standards:

 

Level 1		–		Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that a Fund has the ability to access at the measurement date;
Level 2		–		Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and
Level 3		–		Significant unobservable prices or inputs (including the Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date.

The following is a summary of the inputs used to value the Fund’s investments as of March 31, 2014. The Fund recognizes transfers between the levels as of the beginning of the annual period in which the transfer occurred.

 

		Valuation Inputs
Investments in Securities at Value*		Level 1				Level 2				Level 3				Total
Common Stocks		$	132,967,852			$	–			$	–			$	132,967,852
Short Term Investment			–				2,866,000				–				2,866,000

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Total		$	132,967,852			$	2,866,000			$	–			$	135,833,852

*See Schedule of Investments for industry classifications

For the period ended March 31, 2014, the Fund did not have any transfers between Level 1 and Level 2 securities. The Fund did not have any securities which used significant unobservable inputs (Level 3) in determining fair value during the period.

Indemnification

In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims against the Fund. Also, under the Fund’s organizational documents and by contract, the Directors and Officers of the Fund are indemnified against certain liabilities that may arise out of their duties to the Fund. However, based on experience, the Fund expects the risk of loss due to these warranties and indemnities to be minimal.

Maryland Statutes

By resolution of the Board of Directors, the Fund has opted into the Maryland Control Share Acquisition Act and the Maryland Business Combination Act. In general, the Maryland Control Share Acquisition Act provides that “control shares” of a Maryland corporation acquired in a control share acquisition may not be voted except to the extent approved by shareholders at a meeting by a vote of two-thirds of the votes entitled to be cast on the matter (excluding shares owned by the acquirer and by officers or directors who are employees of the corporation). “Control shares” are voting shares of stock which, if aggregated with all other shares of stock owned by the acquirer or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within certain statutorily defined ranges (one-tenth but less than one-third, one-third but less than a majority, and more than a majority of the voting power). In general, the Maryland Business Combination Act prohibits an interested shareholder (a shareholder that holds 10% or more of the voting power of the outstanding stock of the corporation) of a Maryland corporation from engaging in a business combination (generally defined to include a merger, consolidation, share exchange, sale of a substantial amount of assets, a transfer of the corporation’s securities and similar transactions to or with the interested shareholder or an entity affiliated with the interested shareholder) with the corporation for a period of five years after the most recent date on which the interested shareholder became an interested shareholder. At the time of adoption, March 19, 2009, the Board and the Fund were not aware of any shareholder that held control shares or that was an interested shareholder under the statutes.

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Item 2 - Controls and Procedures.

 

(a)

The registrant’s Principal Executive Officer and Principal Financial Officer have evaluated the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) within 90 days of this filing and have concluded that the registrant’s disclosure controls and procedures were effective, as of that date.

 

(b)

There was no change in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) during registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3 – Exhibits.

Separate certifications for the registrant’s Principal Executive Officer and Principal Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached as Ex99.CERT.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.