Liberty All-Star® Equity Fund Increases Annual Distribution Rate 25 Percent

The Board of Trustees (the “Board”) of Liberty All-Star Equity Fund (the “Fund”) (NYSE: USA) has approved an increase in the Fund’s distribution policy from an annual rate of approximately 8 percent (2.0 percent quarterly) of net asset value (“NAV”) to approximately 10 percent (2.5 percent quarterly). The increase will be effective for the Fund’s fourth quarter distribution which will be declared on November 6, 2017.

The Board believes this increase in the distribution rate may enhance long-term shareholder value by providing a consistent method of distributing the Fund’s assets at NAV while increasing liquidity and reducing the discount at which shares currently trade to NAV. This 25 percent increase in the distribution rate from 8 to 10 percent restores the rate to the level when the distribution policy was first adopted in 1988.

William Parmentier, President of the Fund, said, “This action by the Board balances the interests of all shareholders by increasing the controlled distribution of Fund assets at NAV without disrupting the Fund’s disciplined investment process for our many long-term shareholders.”

A portion of the Fund’s distributions may be treated as paid from sources other than net income, including but not limited to short-term capital gain, long-term capital gain and return of capital. The final determination of the source of all distributions in 2017 for tax reporting purposes, including the percentage of qualified dividend income, will be made after year-end. If the Fund’s net investment income and net realized capital gains for any year exceed the amount distributed under the distribution policy, the Fund may, in its discretion, retain and not distribute capital gains and pay income tax thereon to the extent of such excess.

The Fund does not continuously issue shares and trades in the secondary market, investors wishing to buy or sell shares need to place orders through an intermediary or broker. The share price of a closed-end fund is based on the market’s value. The Fund’s shares are listed on the New York Stock Exchange under the ticker symbol USA. ALPS Advisors, Inc. is the investment advisor of the Fund, a multi-managed, closed-end investment company with more than $1.2 billion in net assets as of September 15, 2017.

Past performance cannot predict future results.An investment in the Fund involves risk, including loss of principal. ALPS Portfolio Solutions Distributor, Inc. – FINRA Member Firm

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Liberty All-Star Equity Fund, Inc. (USA)Bill Parmentier, 1-800-241-1850www.all-starfunds.com