The main objective of this present study is to perform finite element analysis of nanocomposite magnetic materials using micromagnetic theory. Nowadays modern electric motors, wind turbines, electric generators, hybrid vehicles, electric vehicles and aircraft etc. require high performance magnets. The maximum energy product BH max in BH hysteresis loop decides the effectiveness of these magnets. The present rare earth magnets are considered as the best performing magnets and used in many high energy applications. A high throughput research was carried out to increase the BH max of rare earth permanent magnets and the exchange of coupling between hard and soft phase magnetic materials ie, materials which combine a high coercivity hard phase material with the high saturation magnetization of soft phase material. In order to understand the effect of soft phase for different particle sizes and volume distributions on behavior of nanocomposites Nd 2 Fe 14 B/α-Fe, micromagnetic FEM is used. Micromagnetic theory is the studies to understand the microstructure physical properties and to know the performance of magnetic materials at micrometer length scales. To carry out the simulations, the cubic model geometry has to be spatially discretized and need to solve Landau-Lifshitz Gilbert equation and Gibbs energy equation numerically using the finite element method. All these calculations can be carried out by any one of the open source micromagnetic simulation packages (OOMMF, Nmag, Magpar, Mumax and Fidimag). After thorough understanding about the crucial role of microstructures, a new hysteresis model will be developed and it will be compared with experimental data. The various experimental results of difference nano composite magnets is also reviewed. Further, the effect of influence of hybrid materials (hard/soft/hard, hard/soft/soft) on magnetic properties will be analyzed. Being expensive and in high demand, alternates to rare earth magnets (Neodymium) need to be explored.