Mr Woodford has discussed bringing across some of his old stocks from Invesco, according to the Sunday Times, meaning he would take back large stakes in some of Britain's biggest companies.
The off-market deal is designed to avoid havoc in share prices, it reported.
Mr Woodford left Invesco after 25 years last year.
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The new firm, Woodford Investment Management, launched the CF Woodford Equity Income Fund today.
Mr Woodford, head of investments, will manage the fund, focusing on valuation and identifying companies that can deliver sustainable dividend growth and those that he believes will be good dividend payers of the future.
Mr Woodford said: "I will run this new fund in the same way that I have always run money, adopting the same philosophy and the same long-term approach.
"Woodford Investment Management has a culture and an environment that gives me the opportunity to focus on investing – and to build a business committed to its clients' long-term interests."
Craig Newman, chief executive, Woodford Investment Management, said: "The fund will have a simplified pricing structure.
"The only fee investors will pay is the AMC – it takes into account the necessary charges levied to manage and administer the fund.
"We are able to keep our fees low, through the use of modern technology and encouraging investors to use fund platforms, execution-only brokers and financial advice channels, rather than buying directly from us."