In exchange the fund managers would get fees and excess returns on their clients capital.
This way instead of arguing over which approach is better, both groups can benefit from one another.
An example could work like this:
Someone (Goldman, why not) starts a fund called the AlphaPlus fund. Its a mutual fund. You pay a 10% up front commission to get into it, and can withdraw your money whenever you want. Goldman promises to return the exact same as the S&P 500 *PLUS* 1% apr.
Say I hold for 5 years and want to get out. The S&P goes up 10% per year during that time. Goldman owes me whatever an 11% rate of return on whatever I invested up front.
Say I hold the fund for 5 years and want to get out. The S&P has a rate of return of -12% apr. Goldman owes me a -11% rate of return on my principal.
Goldman does this because they get a fat 10% upfront fee from me, plus they can use their super-wizard skills to invest my money in something that returns like 30% apr. Thus, their profit is fees + however much they can beat the market by (and the 1% they owe me).
(edited to give better example given access to keyboard)