Woodford, who announced his intention to set up his own asset management business back in October, will use Oakley’s investment infrastructure to support his new venture.

He will join the business on 1 May 2014, the group confirmed today, and will manage both retail and institutional client money.

Oakley Capital describes itself as an asset management and financial advisory business, and has made 11 investments since its inception in 2007 – the most prominent of which is stake in Time Out magazine.

It has also held an 85% stake in national IFA Broadstone Pensions and Investments since 2010.

The exact nature of Woodford’s new strategy remain unclear, though some commentators have speculated he may seek to focus on the smaller companies that have become a feature of his Invesco Perpetual Income and High Income portfolios in recent years.

Oakely director Peter Dubens said: “I am delighted Neil is joining, and we fully support his desire to create his own transformational asset management business soon after joining Oakley Capital.

“We will fully support the transition and, in the meantime, we will provide an environment in which Neil can have the autonomy and flexibility to best serve the interests of clients.”

Invesco has begun selling down its positions in some of those small-cap holdings ahead of Woodford’s departure, amid a rise in outflows on his funds.

The fund manager, for which Woodford runs over £30bn in assets, has seen around £2bn worth of outflows from the Income portfolios since the manager announced he is to leave.