Naked Inside was launched last December to provide CHI with access to Naked Communications' planning approach. The joint venture consists of a standalone team operating from Naked's Clerkenwell office and sharing space in CHI's Wardour Street headquarters.
Allnutt will initially work at Naked to familiarise himself with its business practices and culture, before eventually moving to CHI.
Will Colin, a co-founder of Naked, said: "Tim's task is to consolidate the business growth we have already achieved with CHI since launching Naked Inside in December. Naked Inside has only been virtual but now it is time to make it a living, breathing entity."
Allnutt joined Initiative in 2000, following its merger with Western International Media, where he previously worked.
Naked Inside has worked with CHI clients including English Heritage, the online travel company Expedia and Premier Foods. The agency was also instrumental in CHI's successful pitch to join BT's creative advertising roster.
Allnutt was unavailable for comment.