Liberty All-Star Growth Fund: Assessing the Multi-Manager Play on AI, Cloud, and Biotech

The Liberty All-Star Growth Fund is built as a scalable vehicle to capture leaders across the growth spectrum. Its core strategy is a multi-manager approach, allocating assets equally among three specialized firms: Weatherbie Capital for small-cap growth, Congress Asset Management for mid-cap growth, and Westfield Capital for large-cap growth. This structure is designed to diversify across market caps while targeting companies with high, sustainable earnings growth, a key characteristic of leaders in expanding secular trends.

The portfolio's alignment with major growth sectors is clear. Top holdings like NVIDIA, Microsoft, Amazon, and Alphabet anchor a significant Information Technology allocation, while Eli Lilly represents a major bet on biotech. This mix directly targets the powerful secular drivers of artificial intelligence, cloud computing, and healthcare innovation. The fund's mandate is to hold a minimum of 65% in equities, with a portfolio turnover rate of 68%-a figure that signals a high-velocity, active strategy focused on capturing growth momentum rather than passive indexing.

For a growth investor, this structure offers a compelling way to access a broad TAM. By combining managers with different capitalization focuses, the fund can participate in the explosive growth of mega-caps while also gaining exposure to the high-potential, higher-risk ventures of smaller companies. The equal allocation ensures no single manager or cap size dominates, spreading the risk inherent in chasing growth. The result is a diversified, multi-cap growth holding that aims to consistently position investors at the forefront of the next wave of economic expansion.

Growth Metrics, Concentration, and the Discount

For a growth investor, the fund's financial mechanics present a clear trade-off. The most persistent feature is the discount to net asset value. As of January 15, 2026, the fund's share price of $5.43 trades at a discount of 10.69% to its NAV of $6.08. This discount is not a new anomaly; it has been a regular feature, with a one-year average discount of 8.3%. For an investor seeking to capture the full growth potential of the underlying portfolio, this discount acts as a direct drag on returns. It means the market is valuing the fund's assets at a significant haircut, which must be overcome before investors see the full benefit of the managers' stock picks.

This discount is set against a portfolio that is heavily concentrated in a few mega-cap leaders. The top 10 holdings alone represent 38.0% of the equity portfolio, with the top five-NVIDIA, Apple, Microsoft, Alphabet, and Amazon-each holding a 5% or 3.7% stake. This concentration is a double-edged sword. On one hand, it provides a powerful lever to the explosive growth of AI and cloud computing. On the other, it magnifies the fund's vulnerability to any stumble by these giants. The portfolio's heavy tilt toward Information Technology (28.6%) and Health Care (16.8%) sectors further amplifies this risk, as it is betting heavily on the success of a narrow set of secular trends.

Yet, the fund's structure provides a notable buffer. Despite its active, high-turnover strategy, the fund maintains minimal leverage, with an effective leverage of just 0.45%. This is a source of financial stability in a volatile market. It means the fund is not using borrowed money to amplify its bets, which protects it from the added pressure of interest costs and margin calls. For a growth investor, this low leverage is a prudent counterweight to the high concentration, offering a margin of safety.

The bottom line for growth investors is a tension between opportunity and execution risk. The fund's heavy concentration in mega-cap tech and biotech is designed to maximize exposure to the highest-growth companies. But the persistent discount suggests the market is skeptical, perhaps viewing the concentration as too risky or the fund's multi-manager structure as adding complexity without sufficient alpha. The low leverage is a positive, but it does little to close the valuation gap. The growth story is intact, but the price of admission is a discount.

Forward-Looking Catalysts, Risks, and the Growth Investor Takeaway

The path for the Liberty All-Star Growth Fund hinges on a few key catalysts and a clear set of risks. For a growth investor, the most direct catalyst is a narrowing of the fund's persistent discount. With shares trading at a 10.69% discount to NAV, a return toward parity would provide an immediate, tangible boost to shareholder returns. This isn't just a valuation quirk; it's a market signal that the fund's multi-manager structure and concentration are being viewed with skepticism. Any shift in sentiment-perhaps driven by strong quarterly performance from its managers or a broader re-rating of closed-end funds-could start to close this gap.

More broadly, the fund's growth catalysts are tied directly to the success of its top holdings. Continued explosive adoption of artificial intelligence by companies like NVIDIA, Microsoft, and Amazon is the primary engine for the portfolio's Information Technology segment. Similarly, the advancement of biotech pipelines, represented by a stake in Eli Lilly, offers a parallel growth vector in healthcare innovation. The fund's active, high-turnover strategy is designed to capture momentum in these secular trends, with its managers continuously monitoring and adjusting positions.

Yet the major risk is the portfolio's heavy concentration. The top 10 holdings alone represent 38.0% of the equity portfolio, with the mega-cap tech giants forming a powerful but vulnerable core. This makes the fund highly susceptible to a sector rotation away from growth stocks or a slowdown in the AI adoption cycle. A stumble by any of these giants could disproportionately impact the fund's NAV and share price, amplifying the discount.

For investors, the fund's structure offers a built-in mechanism for adaptation. The periodic rebalancing and ongoing review of its three specialized managers provide a layer of strategic oversight. This multi-manager approach aims for consistency, but it also means investors must monitor how effectively the managers navigate shifting market conditions.

The takeaway for a growth investor is one of calibrated opportunity. The fund offers a scalable, multi-manager vehicle to access high-TAM sectors like AI and biotech. Its structure provides diversification across market caps and a buffer through minimal leverage. However, the persistent discount and extreme concentration demand careful risk management. The growth story is compelling, but the price of admission is a valuation haircut and a portfolio that rides the fortunes of a few dominant companies.