"Prohibited Sectors" are simply such industries, sectors of the economy, etc. that a Fund will not invest in. Some of these prohibitions are driven by regulatory and compliance matters, while others are a matter of strategic decisions made by the fund managers, factoring in their track record, expertise, as well as the types of limited partners they wish to raise funds from. 

Commonly, publicly traded securities are prohibited (because it's not venture capital), as well as alcohol, gambling, weapons and real estate. Crypto currencies are also commonly prohibited, as they introduce a tremendous amount of complexity into a fund's operations (accounting, legal, taxes, etc.).

For more information, please query the AI Agreement Reviewer on the LPA.