Severe plastic deformation of powder blends consisting of SmCo5-Cu results in magnetically hardened nanocomposite bulk materials. The microstructure is continuously refined with increasing torsional deformation, yet, coercivity saturates at a certain level of strain. Transmission electron microscopy (TEM) investigation of the microstructure reveals a partial amorphization of the SmCo5 phase due to high-pressure torsion by 20 applied rotations. In this amorphous matrix nanocrystals are embedded. The effect of these experimentally observed microstructural features on the magnetic properties are investigated by micromagnetic simulations, which show that an increasing volume fraction of nanocrystals is beneficial for higher coercivities. For a fixed volume fraction of nanocrystals the simulations reveal an increasing coercivity with decreasing the size of the nanocrystals due to increasing number of interfaces acting as pinning sites. Furthermore, our micromagnetic simulations disclose the mechanisms of the saturation and decline of magnetic hardening due to the strain induced by high-pressure torsion. The calculated coercivity fits very well to the experimentally observed coercivity of Hc=1.34 T. The knowledge can also be used to develop and provide optimization strategies from the microstructure perspective.