CHINA'S venture capital and private equity market saw 121 new funds set up in the first half of this year, compared with 340 over the same period last year, according to an industry report.

New funds raised an aggregate US$7.8 billion, slumping 57.8 percent year on year, the Zero2IPO Research Center said in a report today.

"Investors have slowed their pace in the first half when China's capital market grappled with the sluggish economic growth and a liquidity crunch," said the Zero2IPO.

VC/PE firms invested in 516 projects from January to June, involving a total investment of US$9.9 billion, a 20.8 percent decline from the same period in 2012, according to the report.

Among 73 exits completed during the period, only 13 were done though initial public offerings due to a suspension of approval for new share offerings on the mainland.

"The market sentiment remains cautious amid uncertainties over the reboot of IPO market and unclear policy environment," the Beijing-based consultancy said.

The number of limited partners, referring to investors in private equity or venture capital funds, totaled 8,055 in China by the end of June, an increase of 7.2 percent from the end of 2012, according to the report.

Among all the limited partnerships, 6,865 of them were Chinese, representing 85.2 percent of the total, while 1,133 were foreign limited partnerships and 57 were joint-venture.

Investible funds of 6,629 limited partnerships amounted to US&814.7 billion, a slight increase of 0.9 percent from the end of 2012, with 78.4 percent of the funds coming from foreign limited partnerships.