MFN is what worries me about the anchor's side letter, not the 1.25%

MFN in most private fund documents is an election, not an automatic upgrade. At or after each closing you circulate a schedule of the side letter provisions granted so far, and later investors elect which ones they want. The near-universal practice is to tier the election by commitment size, so a provision granted to a 5m investor is only electable by investors committing 5m or more. That is what keeps a 25bps break from spreading to the 250k tickets. Whether your existing LPA actually permits that tiering, and whether a given provision can be excluded from the schedule at all, depends on how your MFN clause is drafted, so your fund counsel has to read it before you promise the anchor anything.

The numbers make the case for tiering obvious. 25bps on 5m is 12.5k a year, call it 62.5k over a five year life. 25bps on the full 20m is 50k a year and 250k over the life, which is real money against your fee budget for staff.

Reporting provisions are the ones people underestimate. Position-level quarterly reporting for one LP is a template you build once and then owe forever, and each cycle it's real analyst hours reconciling to what everyone else received. Sponsors commonly carve regulatory and reporting provisions out of the MFN schedule, and again, whether you can depends on your clause.

The item you haven't raised is the co-invest right. A standing right on every equity check above 4m gives one investor first look at your best allocation, and other LPs will notice when the largest deals arrive with a co-invest already spoken for. Also, one investor holding 20 to 25 percent of the fund means fund two's viability now depends on their re-up decision.