Four-layer verification framework addresses the two risk classes — calculation errors and distribution fraud — driving LP scrutiny and fiduciary liability across private equity
AUSTIN, Texas, May 4, 2026 /PRNewswire/ — 6lock and qashqade today published Distribution Integrity: Engineering Trust in the Moment That Matters Most, a co-authored white paper introducing the Institutional-Grade Distribution Verification Chain — a four-layer framework for managing the calculation and transaction risks that now define distribution operations in private markets.
The paper arrives as LP operational due diligence has deepened significantly. A majority of institutional LPs now rank operational transparency above historical performance when evaluating new manager commitments, and distribution workflows are among the most closely examined areas. Meanwhile, business email compromise attacks targeting capital calls have risen 40% year-over-year, and AI-enabled impersonation has turned the callback procedures most firms rely on into an active attack surface rather than a reliable control.
“When money goes out, that’s the moment your LPs decide whether you run a tight institutional operation — or whether you’re relying on hope and habit,” said Todd Sorrel, Co-founder and CEO of 6lock. “Distribution integrity isn’t an ops issue anymore. It’s a leadership issue.”
The white paper identifies two distinct classes of risk that most firms conflate or address incompletely:
Calculation Risk — errors in waterfall mechanics, fee logic, and LP entitlement calculations that accumulate quietly and surface at the point of distribution. In private markets, a 1% discrepancy can mean millions in misallocated capital. One respondent in qashqade’s annual survey reported a waterfall model error that produced a $20 million overpayment — not misconduct, but the predictable result of using a tool never designed for fiduciary-grade precision. The SEC has repeatedly sanctioned private markets firms for calculation failures over the past decade — not because capital was stolen, but because the math did not reflect the contract.
Transaction and Misdelivery Risk — fraud and misdelivery events that occur at the handoff between calculation and execution, where wire instructions travel between organizations and no single firm’s internal controls apply. Once funds leave the firm, recovery is uncertain and often impossible.
“Relying on spreadsheets in today’s private markets is like building a house on sand,” said Oliver Freigang, Co-founder and CEO of qashqade. “As firms grow and structures become more complex, the risk of operational failure increases exponentially.”
The Verification Chain defines four independently necessary layers of control — Entitlement Integrity, Calculation Integrity, Instruction Integrity, and Release Authorization Integrity — each addressing a distinct failure mode the others cannot compensate for. Strong calculation governance does not prevent a misdelivery event when instruction verification relies on email; robust instruction controls do not protect against LP disputes when waterfall logic was never validated against current fund documents.
TMF Group, working with a private equity client, illustrates the impact: capital call preparation time cut in half, the adoption of LPs contributing via the platform upon enrollment was immediately successful, and an SEC-required post-transaction reconciliation report — previously a once-a-year manual exercise — converted into an automated, on-demand output.
“Since transitioning to 6lock, 35 South Capital has seen more than 80% of our LPs adopt the platform, significantly improving both the speed and security of our capital calls and distributions,” said Valorie Lerner, Managing Director, Investor Relations of 35 South Capital. “What was once a highly manual, multi-step process is now streamlined and verified through 6lock, allowing us to assure our LPs that their banking information is secure and funds are delivered securely and on time.”
The paper also includes a self-assessment tool drawn from the due diligence questionnaires LPs are increasingly deploying. A “No” or “Partial” answer marks a gap that is either already visible to sophisticated LPs or will become so within 12 to 18 months.
Distribution Integrity: Engineering Trust in the Moment That Matters Most is available for download at 6lock.com.
About 6lock
6lock delivers Verified Money Movement (VMM) to lock fraud and human error out of fund flows for private markets. The platform enables identity-verified, secure, and real-time execution of capital calls, distributions, deals, and vendor payments. 6lock is SOC 2 Type II compliant and built to reduce fraud risk, operational burden, and friction across the PE ecosystem.
About qashqade
qashqade is the leading technology firm focused on automating and validating allocation and fee calculations across all capital flows, including waterfalls, fees, and carried interest. By replacing manual, spreadsheet-driven processes with a purpose-built engine, qashqade delivers clarity, certainty, and stability in a fully auditable environment.
Contact:
Rick Medeiros
(510) 556-8517
413537@email4pr.com
SOURCE 6lock