Siguler Guff, the US group specialising in emerging markets and distressed debt investments, has made a rare private equity investment in a Russian bank by acquiring a stake in MDM Bank, one of the country’s biggest lenders.

The deal comes as Russian banks are reeling from big losses due to the economic and financial crisis. It also follows a sharp drop in private equity deals in Russia to $148m this year, less than a 10th of the $1.5bn of last year’s deals, according to Dealogic.