Snyder Taps Management Stars for His Private Fund

Washington Redskins owner Daniel Snyder is lining up an experienced management team to run his $750 million private-equity fund, tapping a former senior associate of the Carlyle Group and the former chairman of Rockville software maker Manugistics Group.

The private-equity fund, known as Red Zone Capital Partners II, also includes a former portfolio manager for TCW Investment Management. The group is on the prowl for "under-marketed companies" that appeal to Snyder's appetite for high-risk, high-reward investments, according to sources familiar with the firm.

Snyder's marketing skills made him a millionaire before he was 35 and turned the Washington Redskins into one of the most valuable sports teams in the world.

Red Zone II last month purchased the privately held Johnny Rockets restaurant chain, known for its 1950s-themed diners and wait staff who dance and sing to oldies music. The price was between $100 million and $110 million, according to industry sources who spoke on the condition of anonymity because of the private nature of the transaction.

Snyder's spokesman, Karl Swanson, did not return phone calls and members of Red Zone II did not respond to inquiries seeking comment. The sources who spoke about the management team agreed to do so on condition of anonymity because the fund is privately held.

Snyder, 42, is known for paying top dollar to employees, whether it be the $5 million salary that lured Redskins Coach Joe Gibbs out of retirement or a similar-size signing bonus to former ESPN programming chief Mark Shapiro, who runs Snyder's Six Flags theme parks.

"He has a reputation that when he wants to have somebody work with him or get involved in a business, he is very generous and will pay whatever it takes," said Marc S. Ganis, a Chicago-based sports consultant who has followed Snyder since he bought the Redskins in 1999 for a record $800 million. "The flip side of that coin is that he has high expectations and he demands that people perform to his standards."

One of the new members of the management team, Steven Ham, is a principal at Red Zone II, according to sources. Ham focused on U.S. buyout opportunities in the defense, aerospace, technology and business services sectors as a senior associate with District-based Carlyle, one of the world's largest and most successful private-equity funds. Ham has also worked at Thomas Weisel Partners, where he focused on technology-related investments.

Gregory J. Owens, former chairman and chief executive of Manugistics, is a managing director of Red Zone II and a close friend of Snyder. A 1982 graduate of Georgia Tech, Owens received accolades for his work at Manugistics. Manugistics was bought last year by rival JDA Software Group of Arizona for about $211 million in cash.

Another managing director, Christopher J. Ainley, formerly of TCW Group of Los Angeles, was an equity research analyst for J.P. Morgan and a portfolio manager with Core Equity Group.

Snyder launched Red Zone II, which was incorporated in July, with close friend Dwight C. Schar, chairman of Reston-based NVR, one of the nation's biggest home builders. Red Zone II has raised $126 million of its $750 million goal, according to a filing with the Securities and Exchange Commission.

Last summer, Snyder, Schar and Six Flags chief executive Shapiro, working under a partnership called First and Goal, cut a two-year deal with Tom Cruise's production company to pay $3 million to $10 million annually for development and overhead costs for the opportunity to finance films and to profit from any hit movies.

Six Flags is a work in progress. Another of Snyder's partnerships, Red Zone Capital, holds 12 percent of Six Flags' stock. Snyder became chairman of Six Flags following a proxy fight in 2005, after which he forced out the old board, installed his own directors and picked Shapiro to run it.

Attendance dropped slightly last year, as the company reshaped its image to be more family-oriented and as theme parks nationwide felt the effects of poor weather and high gasoline prices. Moody's Investors Service last year downgraded Six Flags' corporate rating, saying its management strategy would require more spending and could challenge the company's weak financial position.

To reduce the firm's $2 billion debt, Shapiro announced the sale of seven of its 28 parks for $312 million. While Six Flags stock had risen from around $4 per share before Snyder took over to around $12 about a year ago, it has since declined. It closed at $5.81 yesterday.

Staff researcher Karl Evanzz contributed to this report.