An increasing number of lab-on-a-chip devices require advanced fluid manipulations. We intend to address this requirement by incorporating polymeric responsive materials on the walls of the microfluidic channels of such devices. In this paper we present a magnetic polymer made from commercially available functionalized magnetic nanoparticles and PDMS. Loadings of this polymer up to 5% volume of magnetic material were achieved. We report on the Young's modulus of this material and describe its magnetization behavior with a combination of inter-particle interaction and particle cluster demagnetization effects. The magnetic polymer can have a magnetic susceptibility up to 0.5 and by curing in a magnetic field, a magnetic anisotropy of a factor 2 in susceptibility can be created. Finally, a finite element model simulation is performed to quantify the amplitude of motion of a microstructure made of this magnetic polymer, and the local magnetic actuation with a current running in a micro-fabricated wire is discussed.