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May 12 (Reuters) - Singapore-based asset manager Dymon Asia Capital has received a commitment worth $500 million from Temasek Holdings to start a hedge fund seeding venture at a time the Asian industry is starting to recover after six years of sluggish growth.

Dymon will use the capital to seed new strategies and fund managers and manage all non-investment functions to allow managers focus on their trading activities.

Asia-focused hedge funds returned nearly 16 percent to investors last year, their best annual performance since 2009, according to data from Eurekahedge.

The industry also added $20 billion in assets in 2013, its first growth in three years, according to AsiaHedge, which says the assets under management still remain about $33 billion below the industry's 2007 peak.

Temasek will become a minority stakeholder in Dymon as a result of the arrangement, the hedge fund said in a statement.

The first investment from the venture will be in Port Meadow Fund to be managed by former SAC Capital portfolio manager Carl Vine. The long/short equity hedge fund with a strong Asian bias will be launched in the second quarter.

"With Temasek backing here, the plan is to do more of that and do it more in a systematic way," Dymon President Jay Luo told Reuters in a telephone interview.

Luo, who joined the hedge fund in 2012 from SAC Capital, will lead the venture with Dymon's managing director, Ben Freischmidt, who earlier co-founded GLG Partners' Asia long/short equity business, the firm said in a statement.

Dymon, set up by Danny Yong, a former founding partner and chief investment officer of Abax Global Capital, is one of east Asia's biggest home-grown hedge fund companies with about $4 billion worth of assets under management.

The new arrangement marks Dymon's third venture as it looks to diversify from its main macro hedge fund business which currently makes up most of the firm's assets under management.

The company, which also has a currency fund, branched out to private equity in 2012 with a fund backed by a unit of Singapore state investor Temasek Holdings.

Temasek spokesman Stephen Forshaw confirmed the contents of the statement.

(Editing by Matt Driskill)