MOSCOW (Reuters) – A Russian metals tycoon will buy half of Renaissance Capital, one of Russia's biggest home grown investment banks, for $500 million in a sign the credit crisis has brought some of Moscow's high flyers down to earth.

Renaissance, which has a number of investment funds listed on the Bermuda Stock Exchange, and its larger global peer Morgan Stanley yesterday joined a growing list of banks set to receive fresh equity from cash-rich investors as global liquidity evaporates.

A Renaissance spokesman said the Onexim Group of Mikhail Prokhorov, who made his fortune in metals giant Norilsk Nickel and banking, will buy new equity amounting to 50 percent of Renaissance. He said old shareholders will retain a one-share voting majority.

Onexim said it is buying the stake for $500 million. Onexim chief executive Dmitry Razumov, a former Renaissance Capital employee himself, said Onexim would transfer most of the money yesteeday and open additional lines of credit to the bank.

"People are surprised at the value implied in the Prokhorov deal," Uralsib equity strategist Chris Weafer said. "That is a bit of a reality check on the damage that has been done to the value of the investment banking business."

"The current value is definitely in the bargain basement."

State bank VTB considered buying Renaissance for $4 billion, but the deal never happened, Vedomosti newspaper wrote last year. Renaissance has declined comment on the report.

Senior Russian investment bankers say the turmoil could force a round of consolidation on the broking scene. The founder of another of Moscow's biggest, oldest financial institutions, Troika Dialog, rejected talk his own bank was for sale.

"There is no need to sell Troika right now. It is a time to buy, not to sell," Troika's core owner, Ruben Vardanyan, considered a father of the Russian stock market, told Reuters.

A senior manager at state bank Sberbank said talk that his bank was in negotiations to buy Troika were "only rumours."

The chief of VTB, which helped finance a Gazprom controlled bank's buyout of broker KIT Finance after it failed to meet some obligations on a repurchase agreement last week, said over the weekend his bank would emerge "stronger" from the crisis.

Renaissance, founded in 1995 by a cadre of former CSFB bankers who helped open post-Soviet Russia to world markets, said it had suffered no losses or writedowns in last week's stock market collapse, which saw key indices fall more than 50 percent from their May peak.

Renaissance Capital chief Stephen Jennings told a news conference the Prokhorov investment would raise the bank's capital to $800 million, and net profits of $400 million were expected this year.

"The partnership creates an investment bank with a strong and very liquid balance sheet well placed to aggressively pursue growth opportunities arising from the ongoing turmoil in global financial markets," said Jennings.