In order to obtain sufficient cooling rates for the Relativistic Heavy Ion Collider (RHIC) electron cooling, a bunched beam with high bunch charge, high repetition frequency and high energy is required and it is necessary to use a 'magnetized' beam, i.e., an electron beam with non-negligible angular momentum. Applying a longitudinal solenoid field on the cathode can generate such a beam, which rotates around its longitudinal axis in a field-free region. This paper suggests how a magnetized beam can be accelerated and transported from a RF photocathode electron gun to the cooling section without significantly increasing its emittance. The evolution of longitudinal slices of the beam under a combination of space charge and magnetization is investigated, using paraxial envelope equations and numerical simulations. We find that we must modify the traditional method of compensating for emittance as used for normal non-magnetized beam with space charge to account for magnetization. The results of computer simulations of successful compensation are presented. Alternately, we show an electron bunch density distribution for which all slices propagate uniformly and which does not require emittance compensation.