UPDATE 2-Russian reformer and banker Boris Fyodorov dies

(Adds Medvedev's condolences paragraph 3)

By Dmitry Sergeyev and Melissa Akin

MOSCOW, Nov 20 (Reuters) - Boris Fyodorov, who advised on economic reform in the final years of the Soviet Union, served as Boris Yeltsin's finance minister and founded one of Russia's top investment banks, died on Thursday, his firm said.

Fyodorov, 50, was one of the youngest of his generation of Russian market reformers. He died in London after suffering a stroke, the RIA news agency quoted Russia's embassy in the British capital as saying.

President Dmitry Medvedev, in a message of condolences to Fyodorov's family, praised him as a professional of the higest level who made "the most audacious ideas come true."

Fyodorov was educated in the socialist economics of the Soviet Union but went on to switch between two roles as one of Russia's most prominent economic reformers and a financier with wide contacts in the City of London and Wall Street.

His academic credentials, thick horn-rimmed glasses and bookish manner hid a savvy investment sense.

Fyodorov had held a seat on the board of state controlled gas giant Gazprom since 2000. He said he was backed by more than 7 percent of shares, though he never confirmed the size of his stake in the world's biggest natural gas company.

In 1994 Fyodorov founded one of Russia's first investment banks, UFG, with Harvard educated banker Charlie Ryan, who had begun his career at Credit Suisse First Boston and come to Russia to advise on market reforms.

"Boris was a shining example that one person could combine Russian patriotism and liberalism. He was fervently pro-Russian and fervently pro-market," said Florian Fenner, who set up UFG Asset Management with Fyodorov six years ago and now leads the company.

At Gazprom, Fyodorov played a major role in pushing for better corporate governance at the company, which in the 1990s was brought to its knees by corruption and internal disputes.

"Everybody talked about corporate governance but he was one of the only people who stood up for it, at extreme personal risk to himself, in the bad old days of Gazprom," said Fenner.

Convinced of Russia's lucrative investment opportunities, Fyodorov and Ryan steered UFG through the chaotic and sometimes violent Russian economy of the 1990s that was dominated by a few dozen rich businessmen, known as the oligarchs.

By the time Vladimir Putin -- who both Fyodorov and Ryan had met in St Petersburg the early 1990s -- was elected president in 2000, UFG was one of Russia's most respected investment banks.

As the Russian economy boomed, foreign investment banks started to look for local purchases and Deutsche Bank bought stakes in UFG, finally taking control and turning UFG into its Russian unit.

More recently, UFG Asset Management formed a joint venture with the German bank.