By Svea Herbst-Bayliss

BOSTON, Jan 10 (Reuters) - Hedge fund SAC Capital Advisors on Thursday said it is closing down its Chicago office and laying off staff from the four portfolio teams that work there.

"We regularly review our operations and given the limited opportunity in the region, we didn't believe it made sense to have a separate office in Chicago," an SAC spokesman said.

No exact figure was available as to the number of layoffs, but the spokesman said four teams of portfolio managers and analysts worked in the satellite office and will be let go.

The Stamford, Connecticut-based firm has $14 billion in assets with offices worldwide, including in New York, Hong Kong, London and Boston.

From time to time, it has shut a location, such as its San Francisco office, which was closed several years ago. SAC management had mulled shutting down the Chicago office for some time.

The firm, which has recently drawn fresh scrutiny in the U.S. government's ongoing insider-trading probe, employs roughly 1,000 people around the world including about 125 portfolio managers.

In light of the probe, SAC is planning to raise the size of portfolio managers' bonuses by 3 percentage points for this year in order to retain investment talent.

The government told SAC and its founder Steven A. Cohen late last year that it may bring civil fraud charges in relation to a case in which a former SAC fund manager has been charged with having traded in pharmaceutical companies Elan and Wyeth, now owned by Pfizer, with illegally obtained information about drug-trial results.

Cohen and the firm maintain that "they have acted appropriately and will continue to cooperate with the government's inquiry," the spokesman reiterated.

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