Magnetic fluids, also known as ferrofluids, are man-made colloidal suspensions of magnetic nano particles in a liquid carrier. The forces exerted by an applied magnetic field on a magnetic fluid opens a vast array of possibilities for controlling fluid systems with a magnetic component. In particular, suspensions of magnetic nano and micro-particles, as well as emulsions consisting of suspended magnetic fluid droplets surrounded by a Newtonian continuous phase, offer a high potential for technologically important applications such as magnetic clean up of oil spills and drug targeting. In recent years, there has been a major effort in characterising such complex materials from micro/nano scale hydrodynamic simulations. In this seminar, I will give a brief presentation of magnetic fluids and then I will present some results of a numerical study of the relative trajectories of two magnetic particles interacting in a dilute suspension, aiming to understand the formation of aggregates in magnetic fluids.