Venture capitalist confidence up, still wary-survey

* VC confidence growing

* Some see gradual resumption in IPO, M&A in H2 2009

* But levels remain far below peak years'

By David Lawsky

SAN FRANCISCO, July 8 (Reuters) - Venture capitalists believe the worst of the financial crisis is behind them but are not expecting a rapid recovery in initial public offerings and deals this year, a quarterly survey released on Wednesday showed.

Of the 42 venture capitalists who responded to a survey for this quarter's Silicon Valley Venture Capitalist Confidence Index, some expected a gradual resumption of M&A, investment and initial share float activity in the second half.

"Many of the strongest companies (that) were bridged by existing investors through the past six to nine months ... will now be coming back to the market over the second half of '09 and early part of '10," Tom Rogers of Advanced Technology Ventures told the Index.

He said it will be "interesting" to see what kind of reception they get, but made no predictions.

But others warned that investment would remain depressed through 2009, and that IPO activity will stay below the peak levels of 2006 and 2007 for some time to come.