3 Lessons from EM, Bitcoin Mining & Bad Statistics that Changed How We Build Fund Infrastructure

7 days & ongoing. Zurich to the UAE to Singapore. Boardrooms, lobbies, one airport lounge that smelled like cinnamon for reasons nobody could explain.

I'm spending the last days meeting CIOs, heads of operations, and fund structuring teams across three time zones. Family Offices. Institutional allocators. Specialised Managers managing cross-border vehicles. Vast majority are telling me they are 'data-driven.' And every time, I asked the same question: 'When your Emerging Market allocations underperformed last quarter, did you diagnose what caused it, or did you find what correlated with it?'

In Zurich: polite silence. In Dubai: a long sip of coffee. Singapore: a laugh, then 'honestly, probably the second one.'

Lesson 1: Emerging Market Debt is splitting in two. Not everyone noticed it. The IMF published its latest Global Financial Stability Report in October 2025. One chapter rewrote the playbook on EM sovereign debt. Emerging Markets with strong domestic institutions (Brazil, India, Poland, Indonesia) have been shifting government borrowing into local currency bonds, absorbed by local investors. A resilience play. But a second group - Frontier Markets with weaker policy credibility - are doing the opposite. Shorter maturities. More foreign currency debt. Heavier reliance on domestic banks and central banks as buyers. That's fragility wearing a suit.

The divergence is widening. If you're a Family Office or Asset Manager allocating to EM debt, or structuring vehicles that touch these markets, you shouldn't treat 'Emerging Markets' as one bucket anymore. The infrastructure beneath your allocation needs to reflect which side of the split you're on. At Hummingbird Capital Partners (HCP), this is the structural detail we obsess over.

Lesson 2: Correlation is comfortable. Causation is useful. Most operational and investment decisions in fund management are built on correlation. Two things move together, so we assume one drives the other. NAV tracking error correlates with redemption spikes, so we 'fix' the tracking error. Compliance flags correlate with certain counterparty types, so we avoid those counterparties. But correlation doesn't tell you why.

Judea Pearl, Turing Award winner, describes three levels of reasoning. Level 1: Association - what happened together? This is where most dashboards live. Level 2: Intervention - what happens if I change something? This is where operational decisions should live. Level 3: Counterfactual - what would have happened if I'd acted differently? This is where real learning lives. Most fund operations teams are stuck on Level 1.

If the pattern fits, the mind commits - but that's the trap. Comfortable patterns aren't causal chains. In fund operations, a misdiagnosed root cause compounds. Until it shows up in your LP reporting as something you can't explain.

Lesson 3: Hash Rate vs. Difficulty - a masterclass in self-correcting systems. Bitcoin's network adjusts its mining difficulty every 2,016 blocks, roughly every 2 weeks. If miners are finding blocks too fast, difficulty goes up. If they're leaving, difficulty goes down. The goal: keep block time at ten minutes. Always. This is a self-correcting feedback loop built into protocol.

Why should a fund infrastructure person care? Because this is exactly the design principle that most fund operations lack. When redemption pressure hits a fund, does the operational infrastructure self-adjust? When regulatory requirements change across jurisdictions, does the compliance framework recalibrate automatically? When NAV calculation complexity increases, does the reporting chain absorb it, or break? In most fund structures: it breaks. Someone scrambles. A spreadsheet gets patched.

That's operational alpha: architecture that absorbs shocks the way Bitcoin absorbs hash rate fluctuations. Automatically. Structurally. Every 2 weeks, without anyone calling an emergency meeting. At Hummingbird Capital Partners (HCP), we design cross-border fund infrastructure with this principle at the core. The jurisdictions may vary, but the design philosophy doesn't. Build the adjustment mechanism into the structure. Don't rely on people to be the mechanism.