PE Hub’s Dan Primack has an interview with Michael Bleyzer, CEO of Ukraine-based private equity firm SigmaBleyzer, on the impact of the Russia-Georgia conflict and investing in the former Soviet Union.

Dan: Is there much of a private equity market in Georgia?

Michael: I’m not aware of anyone activity investing there, although that doesn’t mean there is nobody. It’s a very small market with just a few real sectors for private equity. There’s some energy with hydroelectric you could do, and maybe something in food.

I went there before Saakashvilli became president, and met with the previous one. I liked the country but just couldn’t find things to do there. My general thought was that small markets on their own are difficult, and this was one with political worries as well.

Dan: You invest in Ukraine. Any worries about your business there, given the speculation that it could be where Russia goes next?

Michael: We invest not only in Ukraine, but also in Khazachstan - and all of that is going to be impacted to some extent by what’s going on. But I don’t see an immediate danger to Ukraine, because it is a much bigger country than Georgia… Its population is one-third of Russia’s. Also, Crimea is not technically a disputed area, like South Ossettia is in Georgia.

But what’s happening right now in Georgia is why I’ve never felt comfortable investing in Russia, and have never done so. I’ve got lots of friends who’ve made money there and I was tempted, but was worried that the minute I go in something like this would happen.

Dan: So you think Western PE investors in Russia are in trouble?

Michael: It’s more that they’re stuck. I’d advise them to stay away from certain sectors that are particularly vulnerable to political or oligarchic influence, and just stay beneath the radar screen. The Russian economy as a whole will do fine so long as we keep using oil and gas, and some investors will continue to make money there, but it’s a very difficult situation. Russia has a clear goal of expanding its regional sphere of influence, and is winning that fight while the U.S. and the West is losing it. That means that there could be major pressures on Western investors.

Dan: Is the reason you don’t invest in Russia more one of personal morals or one of economic interest?

Michael: It is a bit of a moral issue, but on the purely economic side I think the risk is higher than the rewards I can get there. If I can get similar returns elsewhere and have the choice, I choose not to take the risk.

Drumroll, please: Almost two years after radio station and billboard company Clear Channel Communications began exploring strategic options, its $17.9 billion takeover finally closed on Wednesday.

The deal, slowed by legal battles in two states and negotiations to lower the purchase price, became a symbol of the buyout industry’s glory days and the subsequent struggles of the credit crunch.

Clear Channel had agreed to be acquired by private equity firms Thomas H. Lee Partners and Bain Capital Partners last year. The market quickly changed and credit to fund the acquisition became more costly and difficult to secure.

The buyout firms had agreed to buy Clear Channel for $39.20 per share, but were forced to file lawsuits in New York and Texas to ensure that a syndicate of six banks would still fund the deal. In May, the bank syndicate, the private equity buyers and Clear Channel struck a deal to lower the price to $36 per share.

And now Clear Channel’s stock will cease trading at the end of the day. Phew!

Sirius Satellite Radio and XM Satellite Radio also closed their merger this week after struggling for 526 days, or 17 months, to gain regulatory approval. The new Sirius XM Radio, with more than 18.5 million subscribers, is now the second-largest radio broadcaster after Clear Channel.

The next marathon wait? Shareholders of BCE Inc, the Canadian telecommunications company, must wait until Dec. 11 for the long-awaited $34.1 billion deal to close. Of course, that’s more than five months from now — who knows what could happen?

Not a lot of sunshine and rainbows this week at the Reuters Hedge Fund and Private Equity Summit, being held in Hong Kong, London and New York. Here’s a sampling:

• There will be more hedge fund collapses this year as many managers struggle to borrow the new money they need to trade with and face investors disappointed by recent losses, said David Bailin, who heads Bank of America’s alternative investment group, which has already fired roughly 15 percent of the hedge fund managers it uses. He predicted rough trading for specialized fixed income funds, and said that BoA execs are “not big funds of quant funds … People are willing to trust black boxes only when they work.”

• Smaller Asian hedge funds are in for a painful round of consolidation, according to Eugene Kim, chief investment officer of $250 million hedge fund manager Tribridge Investment Partners. “Investors are demanding more of managers in regards to operational infrastructure, compliance, risk management … you have to have a critical mass of assets under management to be able to pay for all of that,” he said. “A lot of marginal managers who have not been able to make it to the next level in terms of fundraising, in terms of size, are either going to have to merge or get bought out or shut down.”

• Private equity deals will remain small in size and volume for some time compared to their 2007 peaks, as a logjam of debt prevents banks from adding more to their portfolios, Quadrangle managing principal Joshua Steiner told Reuters reporters and editors. The $34.1 billion takeover of BCE — still yet to close — may prove to be the high water mark for the foreseeable future, he said: “Deals of that size will take a long time to come back, if ever.”

Click here for full coverage of the summit. 

Hedge funds are ready to set records this year, but not necessarily the good kind.

“The bubble has popped and there is going to be a lot of pain,” said Bradley Alford, the founder of hedge fund advisory firm Alpha Capital Management. “There will be a massive reassessment of where money should go.”

Many investors expect the $1.8 trillion industry’s estimated 10,000 funds to be winnowed down by a few thousand in a few years. Funds that oversaw nearly $4 billion in assets have already closed their doors in the first quarter of 2008.

Amid the turbulence, top executives in Singapore, Hong Kong, London and New York are taking part in the Reuters Hedge Funds and Private Equity Summit this week.

Speakers include:

• Michael Travaglini, Executive Director, Massachusetts State Pension Fund
• Bruce Richards, President and CEO, Marathon Asset Management
• Rep. Richard Baker, President and CEO, Managed Funds Association
• Jane Buchan, CEO, Pacific Alternative Asset Management
• Peter Fitzsimmons, Co-President, AlixPartners
• David Balin, Head of Alternative Investments, Bank of America
• Tanya Beder, Chairman, SBCC Group; former CEO, Citigroup’s Tribeca Global Management LLC
• Mark Epley, Head of Financial Sponsors Group, Deutsche Bank
• Patrick Egan, CEO, Attalus Capital Management

A few of the stories so far:

• Hedge funds suffering painful start to year
• Hedge fund deleveraging over for now: HSBC Halbis
• KGR weighs new fund, offering to boost assets
• 3i ramps up team to support growth in Asia

(Photo: A performer runs inside a bubble during Uzbekistan’s Independence Day celebrations)