Liberty Financial Acquires Crabbe Huson Group, Huson Retires.

PORTLAND, Ore.--(BUSINESS WIRE)--June 11, 1998--

Liberty acquires Portland-based asset and fund manager in cash

and stock transaction; Richard Huson, under treatment for cancer,

retires from active involvement in firm

Liberty Financial Companies (NYSE:L) announced today that it has reached an agreement to acquire The Crabbe Huson Group Inc., a Portland, Oregon-based investment firm with approximately $5.3 billion in assets under management.

Liberty Financial has agreed to pay up to $147.5 million to complete the transaction, depending on achievement of certain growth goals, with 90% of the consideration to be paid in cash and 10% in newly issued shares of Liberty Financial common stock.

Liberty Financial, a diversified asset management firm with $54 billion in total assets, will also establish a special incentive plan to encourage Crabbe Huson's current team of investment professionals and management to continue the firm's strong growth. The transaction has been approved by the boards of directors of Liberty Financial and Crabbe Huson and is expected to close early in the fourth quarter. Co-founders Jim Crabbe and Richard Huson will invest a significant share of their personal proceeds from the sale in mutual funds managed by Crabbe Huson and another Liberty subsidiary, Colonial Mutual Funds.

As a separate operating subsidiary of Liberty Financial, Crabbe Huson will remain headquartered in Portland and will continue to operate under the Crabbe Huson name. Co-founder Jim Crabbe will serve as president and chief investment officer of the subsidiary.

In addition, Richard Huson has elected to retire from active involvement in the firm he co-founded with Crabbe in 1980. Huson has been on medical leave recently for treatment of cancer. Though his treatment has been successful thus far, Huson decided to scale back his professional commitments in favor of time for his family and other pursuits.

Founded in 1980, Crabbe Huson employs a unique investment style known as contrarian investing, which is characterized by generally lower volatility and a relatively low statistical correlation with the overall market. The firm manages approximately $4 billion for institutional investors, primarily pension funds, and approximately $1 billion in mutual fund assets. Its institutional business has shown considerable growth in recent years, as institutions have sought to diversify their portfolios across asset classes and investment styles.

Excellent strategic fit between organizations

In commenting on the acquisition, Kenneth R. Leibler, president and chief executive officer of Liberty Financial, said, "Crabbe Huson fits our acquisition strategy perfectly. It brings us a distinctive investment style that complements our existing asset management companies. We have a strong record of integrating such companies into Liberty Financial, leveraging their expertise to raise new assets through multiple distribution channels."

Liberty Financial's other investment management units include Stein Roe and Farnham, a highly respected growth stock manager, and the Colonial Group, which utilizes a "value style" in managing equity portfolios.

"We are truly excited about becoming a part of Liberty Financial," said Crabbe. "In recent years we've had to devote an increasing amount of time and resources to administration and keeping up with the dynamics of the mutual fund distribution business. Liberty's considerable resources will help us grow our business and provide even better service to our customers and will allow us to concentrate all of our efforts on our core competency of investment management."

"Our acquisition strategy is quite different from those companies in our industry who are known as purely financial buyers," said Leibler. "We look for companies that bring new capabilities to our total organization, and Crabbe Huson, with their contrarian investment style, certainly fits that model. We see a real opportunity to integrate Crabbe Huson's capabilities into other parts of our company to expand our product offerings and distribution."

Crabbe Huson's integration will increase Liberty Financial's total institutional management assets to almost $10 billion. "We will have significant expertise in several sectors of the institutional business," continued Leibler. "We also believe that our different investment units can help cross-sell each other's services."

Best of all worlds for clients, shareholders, firm owners

Crabbe said the transaction creates a mechanism to satisfy Huson's interest in the firm while also addressing long-range succession planning issues. "We want Crabbe Huson to continue to serve the interests of shareholders and clients, but believe it would be much more difficult to do if an orderly transfer of ownership is not planned and carried out," Crabbe said.

"Our mutual fund shareholders will get the best of all worlds by having us continue to manage the funds as before, but under the umbrella of a larger fund organization with expanded investment options and shareholder services," Crabbe said.

Liberty Financial Companies (NYSE:L) is an integrated asset accumulation and management organization. It manages nearly $54 billion of assets on behalf of more than 1.7 million investors worldwide through an array of fixed, variable and indexed annuities, private and institutional accounts, and 75 mutual funds. Its operating companies include Keyport Life Insurance Company, The Colonial Group Inc., Stein Roe & Farnham Incorporated, Newport Pacific Management Inc., Independent Financial Marketing Group, Inc. and Liberty Asset Management Company.

Founded in 1980 by James Crabbe and Richard Huson, CFA, The Crabbe Huson Group Inc. is a nationally recognized contrarian-style investment manager. The Portland, Ore.-headquartered firm offered the first in its family of nine mutual funds in 1988. Crabbe Huson now manages a total of $5 billion, including more than $1 billion in mutual fund assets.

CONTACT: The Crabbe Huson Group, Inc.

Mason Cole, 503/417-3526

[e-mail]

www.contrarian.com

or

Liberty Financial Companies

Alicia Verity, 617/371-2263

[e-mail]

www.lib.com