* Lavreno Ltd, affiliated with Galitskiy, sells 1 pct
* Investors from UK, U.S. buy 79 pct of shares on offer
* Proceeds to fund Galitskiy's own projects
* Galitskiy to remain long-term strategic investor (Adds VTB Capital comments on buyers)
By Maria Kiselyova
MOSCOW, Feb 5 (Reuters) - Russia's top food retailer Magnit attracted strong demand from foreign investors as its founder and CEO sold a 1 percent stake to fund his own projects.
The share sale comes as foreign investors have largely turned sour on Russia because of a stand-off over Ukraine and an economic crisis deepened by a slump in oil prices and Western sanctions imposed over the Ukraine crisis.
Magnit said on Thursday Cyprus-based Lavreno Ltd, affiliated with its biggest shareholder and founding chief executive Sergey Galitskiy, had raised 9.8 billion roubles ($143 million) by selling down its stake to fund a separate investment.
Funds from Britain bought 53 percent of the shares sold while U.S. investors acquired 26 percent, said bookrunner VTB Capital, the investment arm of Russian bank VTB.
"Following an international roadshow last week there was very positive feedback from investors ... The book was filled in very quickly, literally in several hours, and it was oversubscribed at a very comfortable level," said Yelena Khisamova, head of Equity Capital Markets at VTB Capital.
She said that Russian funds, including those managing pension contributions, bought 20 percent while a very limited amount was acquired by investors from continental Europe.
Magnit said last week it planned to open as many stores in 2015 as never before in one year, confident it can win crisis-hit customers without giving up much profitability despite a looming recession.
Galitskiy, who directly owns 38.67 percent of Magnit shares, will remain the long-term strategic investor in the company, Magnit said in a statement.
Lavreno had previously held a 3.44 percent stake in Magnit on behalf of Galitskiy. It sold 1 million shares, or 1 percent of all Magnit shares, at 9,823 roubles each.
The price represents an around 5 percent discount to the market price of 10,340 roubles at Wednesday's closing. The shares were down 1.2 percent at 10,215 roubles by 1135 GMT.
"The proceeds to Lavreno from the placing will be used to fund a separate investment," Magnit said without providing further details.
Galitskiy had earlier told Reuters he could gradually lower his stake to fund projects such as the construction of a stadium for his soccer club FC Krasnodar.
Morgan Stanley acted as a joint bookrunner for the offer. (Reporting by Maria Kiselyova; Editing by Elizabeth Piper and Vincent Baby)